Problem 6-26 (Algo) Restructuring a Segmented Income Statement [LO6-4]

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	$ 311,000	$ 798,000	$ 698,000
Regional expenses (traceable):
Cost of goods sold	93,000	241,000	315,000
Advertising	104,000	238,000	243,000
Salaries	59,000	59,000	109,000
Utilities	9,100	16,300	14,400
Depreciation	20,000	35,000	29,000
Shipping expense	15,000	31,000	37,000
Total regional expenses	300,100	620,300	747,400
Regional income (loss) before corporate expenses	10,900	177,700	(49,400)
Corporate expenses:
Advertising (general)	18,000	38,000	33,000
General administrative expense	20,000	20,000	20,000
Total corporate expenses	38,000	58,000	53,000
Net operating income (loss)	$ (27,100)	$ 119,700	$ (102,400)

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. (Round percentage answers to 1 decimal place.)