Problem 7-21 Segment Reporting and Decision-Making [LO7-4] Vulcan Company's contribution format income statement for June is as follows: Vulcan Company Income Statement For the Month Ended June 30 Sales Variable expenses Contribution margin Fixed expenses Net operating income $ 800,000 308,000 492,000 455,000 $ 37,000 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 $248,000 in variable expenses during June; the remaining sales and variable expenses were recorded in the Southern Territory. Fixed expenses of $140,000 and $84,000 are traceable to the Northern and Southern Territories, respectively. The rest of the fixed expenses are common to the two territories. b. The company is the exclusive distributor for two products-Paks and Tibs. Sales of Paks and Tibs totaled $110,000 and $290,000, respectively, in the Northern territory during June. Variable expenses are 33% of the selling price for Paks and 73% for Tibs. Cost records show that $68,200 of the Northern Territory's fixed expenses are traceable to Paks and $60,900 to Tibs, 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 territories. 1-b. Prepare contribution format segmented income statements for the Northern Territory broken down by product line. Answer is not complete. Complete this question by entering your answers in the tabs below. 1-D. Prepare contribution format segmented income statements for the Northern Territory broken down by product line. Answer is not complete. Complete this question by entering your answers in the tabs below. Req 1A Req 18 Req 1A Raq 18 Prepare contribution format segmented income statements for the total company broken down between sales territories. (Round your percentage answers to 1 decimal place (i.e. 0.1234 should be entered as 12.3).) Prepare contribution format segmented income statements for the Northern Territory broken down by product line. (Round your percentage answers to 1 decimal place (ie. 0.1234 should be entered as 12.3).) Sales Territory Product Line Total Company Northern Southern Amount % Amount Sales $ 800,000 100.0 $400,000 % 100.0 Amount $400,000 % Amount Northern Territory % Paks Tibs Amount % 100.0 Sales $400,000 $ 110.000 Amount $290,000 % Variable expenses 308,000 38.5 248,000 62.0 60,000 15.0 Varable expenses 248,000 Contribution margin 492,000 61.5 152,000 38.0 340,000 85.0 Contribution margin 152,000 0.0 110,000 0.0 290,000 0.0 Traceable fixed 224,000 28.0 140,000 35.0 84,000 21.0 margin expenses Territorial segment Common fixed expenses Traceable fixed expenses 140.000 268,000 33.5 $ 12,000 3.0 $ 256,000 64.0 Product line segment margin 12.000 0.0 $ 110.000 0.0 $ 290,000 0.0 Common fixed expenses 224,000 224,000 28.0 Sales territory segment margin 0.0 Net operating income $ 44,000 5.5 (212,000) Rea 18