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			$	803,000		$	695,000
Regional expenses (traceable):
Cost of goods sold		99,000				238,000			319,000
Advertising		102,000				242,000			240,000
Salaries		55,000				57,000			114,000
Utilities		8,800				16,200			14,000
Depreciation		24,000				32,000			27,000
Shipping expense		13,000				32,000			37,000
Total regional expenses		301,800				617,200			751,000
Regional income (loss) before corporate expenses		10,200				185,800			(56,000	)
Corporate expenses:
Advertising (general)		16,000				41,000			36,000
General administrative expense		18,000				18,000			18,000
Total corporate expenses		34,000				59,000			54,000
Net operating income (loss)	$	(23,800	)		$	126,800		$	(110,000	)

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.