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$313,000 $797,000 $697,000

Regional expenses (traceable):

Cost of goods sold 93,000 237,000 319,000

Advertising 101,000 238,000 235,000

Salaries 57,000 58,000 109,000

Utilities 8,900 15,600 14,400

Depreciation 23,000 34,000 27,000

Shipping expense 17,000 25,000 36,000

Total regional expenses 299,900 607,600 740,400

Regional income (loss) before corporate expenses 13,100 189,400 (43,400)

Corporate expenses:

Advertising (general) 15,000 38,000 35,000

General administrative expense 19,000 19,000 19,000

Total corporate expenses 34,000 57,000 54,000

Net operating income (loss)$(20,900) $132,400 $(97,400)

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.