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 profits, management prepared the segmented income statement for May as shown below.

Sales Region

West Central East

Sales $ $312,000$ $ $796,000$ $ $698,000$

Regional expenses $($traceable$)$:

Cost of goods sold $91,000241,000311,000$

Advertising $103,000240,000242,000$

Salaries $56,00054,000106,000$

Utilities $8,80016,40014,300$

Depreciation $22,00033,00027,000$

Shipping expense $13,00033,00043,000$

Total regional expenses $293,800617,400743,300$

Regional income $($loss$)$ before corporate expenses $18,200178,600(45,300)$

Corporate expenses:

Advertising $($general$)14,00040,00035,000$

General administrative expense $19,00019,00019,000$

Total corporate expenses $33,00059,00054,000$

Net operating income $($loss$)$ $ $(14,800)$ $ $119,600$ $ $(99,300)$

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.