Problem 7-21 (Algo) Segment Reporting and Decision-Making [LO7-4] Vulcan Company's contribution format income statement for June is as follows: Management is disappointed with the company's performance and is wondering what can be done to improve profits. By examining sales and cost records, you have determined the following: a. The company is divided into two sales territories - Northern and Southern. The Northern Territory recorded $400,000 in sales and $188,000 in variable expenses during June; the remaining sales and variable expenses were recorded in the Southern Territory Fixed expenses of $188,000 and $110,000 are traceoble to the Northern and Southern Territories, fespectively. The rest of the fixed expenses are common to the two tertitories. b. The company is the exclusive distributor for two products-Paks and Tibs, Soles of Paks and Tibs totaled $200,000 and $200,000. respectively, in the Northern terntory during June. Variable expenses are 30% of the selling price for Paks and 64X for Tos. Cost records show that $92,000 of the Nonthern Territorys foxed expenses are traceable to Paks and $50,000 to Tios, with the remainder common to the two products. Required: 1.a. Prepare contribution format segmented income statements for the total company broken down between sales terntories. 1.b. Prepare contribution format segmented income stotements for the Northern Territory broken down by product line