The marketing segment sales for Caterpillar Inc. (CAT) for a recent year follow Caterpillar Inc. Machinery and Engines Marketing Segment Sales (in millions) Building Large Marine & Construction Cat Core Earth Electric Power Petroleum Products Japan Components moving Power Excavation Systems Logistics Power Mining Turbines Sales $2,217 $1225 $1,234 $5,045 $2,847 $2,885 $659 $2.132 $3.975 $3,321 in addition, assume the following information Building Large Marine & Construction Cat Core Earth Electric Power Petroleum Products Japan Components moving Power Excavation Systems Logistics Power Mining Turbines Variable cost of goods sold as a percent of sales 45% 55% 49% 51% 545 52 5 SO 50% 48% Dealer commissions as a percent of sales 11 8% 10% 6 5 10% 99 9% Variable promotion expenses in millions) 310 120 150 600 200 600 300 75 270 480 400 . Use the sales information and the actional assumed information to prepare a contribution margin by segment report. Round answers to two decimal places, except for contribution margin ratio, which should be rounded to one decimal place. Enter all amounts as positive numbers Caterpillar Inc Contribution Margin by Segment (assumed) (in millions, except ratio figures) Building Construction cat Japan Core Electric Earthmoving Excavation Large Power Logistics Marine and Turbines Products Components Power Mining Systems Petroleum Power Sales Variable cost of goods sold Manufacturing 5 $ margin Dealer comme Variable promotion expenses Variable selling turbines Contion margin Contribution margin od dd di b. Prepare a table showing the manufacturing margin, dealer commissions, and variable promotion expenses as a percent of sales for each segment. Round percents to one decimal place, if required. Enter all amounts as positive numbers. Caterpillar Inc. Contribution Margin by Segment (assumed) (in millions, except ratio figures) Building Construction Cat Japan Core Electric Large Power Logistics Marine and Earth moving Turbines Products Excavation Power Components Mining Systems Petroleum Power Manufacturing margin Dealer commissions Variable promotion expenses Contribution margin rabo 16 C. All of the following are contributing reasons that Cat Japan is the poorest performing segment except a. The manufacturing margin as a percentage of sales is the lowest b. The dealer commissions a percentage of sales are the highest The variable promotion expenses as a percentage of sales are the highest d. The variable cost of goods sold as a percentage of sales is the highest None of these choices is correct The correct answer is Segment Profitability Analysis The marketing segment sales for Caterpillar Inc. (CAT) for a recent year follow: Caterpillar Inc. Machinery and Engines Marketing Segment Sales (in millions) Building Large Marine & Construction Cat Core Earth Electric Power Petroleum Products Japan Components moving Power Excavation Systems Logistics Power Mining Turbines Sales $2,217 $1,225 $1,234 $5,045 $2,847 $4,562 $2,885 $659 $2,132 $3,975 $3,321 In addition, assume the following information Building Large Marine & Construction Cat Core Earth Electric Power Petroleum Products Japan Comphnents moving Power Excavation Systems Logistics Power Mining Turbines Variable cost of goods sold as a 45% 55% 49% percent of sales 51% 54% 52% 53% 50% 50% 52% 4896 Dealer commissions as a percent of sales 9% 11% 8% 8% 10% 6% 5% 10% 99 79 99% Variable promotion expenses (in millions) 310 120 150 600 200 600 300 75 270 480 400 a. Use the sales information and the additional assumed information to prepare a contribution margin by segment report. Round answers to two decimal places, except for contribution margin ratio, which should be rounded to one decimal place. Enter all amounts as positive numbers Caterpillar Inc. Contribution Margin by Segment (assumed) (in millions, except ratio figures) Marine Building Core Cat Japan Large Electric Logistics and Construction Components Earthmoving Excavation Power Mining Power Petroleum Products Systems Power oddo pado of oddo poldo oddo Sales Variable cost of goods sold Manufacturing margin Dealer commissions Variable promotion expenses Variable selling expenses Contribution margin Contribution margin ratio libodo podod o di % 90 b. Prepare a table showing the manufacturing margin, dealer commissions, and variable promotion expenses as a percent of sales for each segment. Round percents to one decimal place, if required. Enter all amounts as positive numbers Caterpillar Inc. Contribution Margin by Segment (assumed) (in millions, except ratio figures) Marine Building Core Cat Japan Large Construction Electric Logistics and Components Earthmoving Excavation Power Mining Products Power Petroleum Systems Power Manufacturing % 96 % % % % % % % % margin Dealer 9 96 % % 96 % % 96 commissions Variable 9% promotion 996 % % % % % % % 2 expenses Contribution % % % % % % % % % 9 margin ratio c. All of the following are contributing reasons that Cat Japan is the poorest performing segment except: a. The manufacturing margin as a percentage of sales is the lowest. b. The dealer commissions as a percentage of sales are the highest c. The variable promotion expenses as a percentage of sales are the highest d. The variable cost of goods sold as a percentage of sales is the highest. e. None of these choices is correct The correct answer is