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 companys first effort at preparing a segmented income statement for May is given below.

	Sales Region
	West				Central			East
Sales	$	312,000			$	800,000		$	697,000
Regional expenses (traceable):
Cost of goods sold		99,000				236,000			318,000
Advertising		104,000				239,000			240,000
Salaries		50,000				54,000			111,000
Utilities		8,800				15,800			14,200
Depreciation		23,000				30,000			29,000
Shipping expense		15,000				25,000			41,000
Total regional expenses		299,800				599,800			753,200
Regional income (loss) before corporate expenses		12,200				200,200			(56,200	)
Corporate expenses:
Advertising (general)		14,000				40,000			35,000
General administrative expense		19,000				19,000			19,000
Total corporate expenses		33,000				59,000			54,000
Net operating income (loss)	$	(20,800	)		$	141,200		$	(110,200	)

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

Required:

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

	Total Company		West		Central		East
	Amount	%	Amount	%	Amount	%	Amount	%
Sales	$1,809,000	100.0	$312,000	100.0	$800,000	100.0	$697,000	100.0
Variable expenses:
Cost of goods sold	653,000		99,000		236,000		318,000
Shipping expense	81,000		15,000		25,000		41,000
Total variable expenses	734,000	0.0	114,000	0.0	261,000	0.0	359,000	0.0
Contribution margin	1,075,000	100.0	198,000	100.0	539,000	100.0	338,000	100.0
Traceable fixed expenses:
Advertising	583,000		104,000		239,000		240,000
Salaries	215,000		50,000		54,000		111,000
Utilities	37,200		8,000		15,000		14,200
Depreciation
Total traceable fixed expenses	835,200	0.0	162,000	0.0	308,000	0.0	365,200	0.0
Regional segment margin	239,800	100.0	$36,000	100.0	$231,000	100.0	$(27,200)	100.0
Common fixed expenses:
Advertising
General administrative
Total common fixed expense	0	0.0
Net operating income (loss)	$239,800	100.0