Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Millard Corporation is a wholesale distributor of office products. It purchases office products from manufacturers and distributes them in the West, Central, and East regions.

Millard Corporation is a wholesale distributor of office products. It purchases office products from manufacturers and distributes them in the West, Central, and East regions. Each of these regions is about the same size and each has its own manager and sales staff.

The company has been experiencing losses for many months. In an effort to improve performance, management has requested that the monthly income statement be segmented by sales region. The company's first effort at preparing a segmented income statement for May is given below.

Sales Region

WestCentralEastSales$313,000$805,000$698,000Regional expenses (traceable):Cost of goods sold98,000236,000311,000Advertising104,000244,000244,000Salaries59,00056,000106,000Utilities9,50016,50013,900Depreciation22,00029,00025,000Shipping expense13,00034,00037,000Total regional expenses305,500615,500736,900Regional income (loss) before corporate expenses7,500189,500(38,900)Corporate expenses:Advertising (general)13,00038,00032,000General administrative expense22,00022,00022,000Total corporate expenses35,00060,00054,000Net operating income (loss)$(27,500)$129,500$(92,900)

The cost of goods sold and shipping expense are both variable. All other costs are fixed.

Required:

3.Prepare new contribution format segmented income statement for May.(Round percentage answers to 1 decimal place.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Practicing Financial Planning

Authors: Sid Mittra, Anandi P Sahu, Brian Fischer

12th Edition

9386042851, 9789386042859

More Books

Students also viewed these Accounting questions