Morley.r Products is a wholesale distributor that competes in three marketsCommercial, Home, and School. lt prepared the following segmented income statement: Commercial Total Company Market Home Market School Market Sales 5 20,000,000 100.0% 5 3,000,000 $ 5,000,000 5 7,000,000 Less expenses: Cost of goods sold 9,500,000 47.5% 3,900,000 2,400,000 3,200,000 Sales support 3,600,000 13.0% 1,440,000 900,000 1,260,000 Order processing 1,720,000 3.6% 633,000 430,000 602,000 Warehousing 940,000 4.7% 376,000 235,000 329,000 Packing and shipping 520,000 2.6% 203,000 130,000 132,000 Advertising 1,690,000 3.5% 676,000 422,500 591,500 General management 1,310,000 6.5% 524,000 327,500 453,500 Total expenses 19,230,000 96.4% 7,312,000 4,345,000 6,623,000 Net; operating income 5 720,000 3.6% 5 133,000 5 155,000 5 377,000 Although the Commercial Market has the highest sales, it reports much lower prot than the School Market Therefore, management is considering shifting attention and resources airwayI from the Commercial Market and towards the School Market They have asked for your recommendation how to proceed. You have decided to create a properly formatted segmented income statement. To assist in this endeavor, you have gathered the following information: a. The cost of goods sold gures shown in the income statement above are traceable to their respective markets. b. Sales supporL order processing, and packing and shipping are variable costs. Warehousing, general management, and advertising are xed costs. In the income statement above, all ofthese costs have been allocated to the three markets on the basis of sales dollars. c. Using your knowledge of activitybased costing, you have compiled the following data: Amount of Activity Commercial School Cost Pool and [Allocation Base) Total Cost Market Home Market Market Total Sales support (number of calls} 5 3,600,000 3,000 5,000 11,000 24,000 Order processing (number of orders} 5 1,720,000 1,750 5,200 1,650 8,600 Warehousing (square feet of space} 5 940,000 35,000 65,000 17,500 117,500 Packing and shipping (pounds shipped} S 520,000 24,000 16,000 64,000 104,000 d. You have also determined the following breakdown ofthe company's advertising expense and general management expense: Commercial School Total Market Home Market Market Advertising: Traceable 5 1,460,000 $ 700,000 5 180,000 5 530,000 Common 5 230,000 General management: Traceable salaries $ 410,000 $ 150,000 $ 120,000 $ 140,000 Common 5 900,000 Required: 1. Refer to the data in part {c} above. Calculate an activity rate for each cost pool. Then, using those rates, allocate each cost pool to the company's three markets. 1 Prepare a revised contribution format segmented income statement tor the company. Include an \"Amount\" column and a \"Percent" column for the company as a whole and for each market segment. Complete this question by entering your answers in the tabs below. Req 1a Req 1b Req 2 Calctlate an activity rate for each cost pool. Packing and shipping - per pound shipped \f\f\f