The marketing segment sales for Caterpillar Inc. (CAT) for a recent year follow:

	Caterpillar Inc. Machinery and Engines Marketing Segment Sales (in millions)
	Building Construction Products		Cat Japan		Core Components		Earth moving		Electric Power		Excavation		Large Power Systems		Logistics		Marine & Petroleum 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 Construction Products		Cat Japan		Core Components		Earth moving		Electric Power		Excavation		Large Power Systems		Logistics		Marine & Petroleum Power		Mining		Turbines
Variable cost of goods sold as a percent of sales	45%		55%		49%		51%		54%		52%		53%		50%		50%		52%		48%
Dealer commissions as a percent of sales	9%		11%		8%		8%		10%		6%		5%		10%		9%		7%		9%
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)
	Building Construction Products	Cat Japan	Core Components	Earthmoving	Electric Power	Excavation	Large Power Systems	Logistics	Marine and Petroleum Power	Mining	Turbines
Sales	$fill in the blank 227371fe4fa8075_1	$fill in the blank 227371fe4fa8075_2	$fill in the blank 227371fe4fa8075_3	$fill in the blank 227371fe4fa8075_4	$fill in the blank 227371fe4fa8075_5	$fill in the blank 227371fe4fa8075_6	$fill in the blank 227371fe4fa8075_7	$fill in the blank 227371fe4fa8075_8	$fill in the blank 227371fe4fa8075_9	$fill in the blank 227371fe4fa8075_10	$fill in the blank 227371fe4fa8075_11
Variable cost of goods sold	fill in the blank 227371fe4fa8075_12	fill in the blank 227371fe4fa8075_13	fill in the blank 227371fe4fa8075_14	fill in the blank 227371fe4fa8075_15	fill in the blank 227371fe4fa8075_16	fill in the blank 227371fe4fa8075_17	fill in the blank 227371fe4fa8075_18	fill in the blank 227371fe4fa8075_19	fill in the blank 227371fe4fa8075_20	fill in the blank 227371fe4fa8075_21	fill in the blank 227371fe4fa8075_22
Manufacturing margin	$fill in the blank 227371fe4fa8075_23	$fill in the blank 227371fe4fa8075_24	$fill in the blank 227371fe4fa8075_25	$fill in the blank 227371fe4fa8075_26	$fill in the blank 227371fe4fa8075_27	$fill in the blank 227371fe4fa8075_28	$fill in the blank 227371fe4fa8075_29	$fill in the blank 227371fe4fa8075_30	$fill in the blank 227371fe4fa8075_31	$fill in the blank 227371fe4fa8075_32	$fill in the blank 227371fe4fa8075_33
Dealer commissions	$fill in the blank 227371fe4fa8075_34	$fill in the blank 227371fe4fa8075_35	$fill in the blank 227371fe4fa8075_36	$fill in the blank 227371fe4fa8075_37	$fill in the blank 227371fe4fa8075_38	$fill in the blank 227371fe4fa8075_39	$fill in the blank 227371fe4fa8075_40	$fill in the blank 227371fe4fa8075_41	$fill in the blank 227371fe4fa8075_42	$fill in the blank 227371fe4fa8075_43	$fill in the blank 227371fe4fa8075_44
Variable promotion expenses	fill in the blank 227371fe4fa8075_45	fill in the blank 227371fe4fa8075_46	fill in the blank 227371fe4fa8075_47	fill in the blank 227371fe4fa8075_48	fill in the blank 227371fe4fa8075_49	fill in the blank 227371fe4fa8075_50	fill in the blank 227371fe4fa8075_51	fill in the blank 227371fe4fa8075_52	fill in the blank 227371fe4fa8075_53	fill in the blank 227371fe4fa8075_54	fill in the blank 227371fe4fa8075_55
Variable selling expenses	$fill in the blank 227371fe4fa8075_56	$fill in the blank 227371fe4fa8075_57	$fill in the blank 227371fe4fa8075_58	$fill in the blank 227371fe4fa8075_59	$fill in the blank 227371fe4fa8075_60	$fill in the blank 227371fe4fa8075_61	$fill in the blank 227371fe4fa8075_62	$fill in the blank 227371fe4fa8075_63	$fill in the blank 227371fe4fa8075_64	$fill in the blank 227371fe4fa8075_65	$fill in the blank 227371fe4fa8075_66
Contribution margin	$fill in the blank 227371fe4fa8075_67	$fill in the blank 227371fe4fa8075_68	$fill in the blank 227371fe4fa8075_69	$fill in the blank 227371fe4fa8075_70	$fill in the blank 227371fe4fa8075_71	$fill in the blank 227371fe4fa8075_72	$fill in the blank 227371fe4fa8075_73	$fill in the blank 227371fe4fa8075_74	$fill in the blank 227371fe4fa8075_75	$fill in the blank 227371fe4fa8075_76	$fill in the blank 227371fe4fa8075_77
Contribution margin ratio	fill in the blank 227371fe4fa8075_78%	fill in the blank 227371fe4fa8075_79%	fill in the blank 227371fe4fa8075_80%	fill in the blank 227371fe4fa8075_81%	fill in the blank 227371fe4fa8075_82%	fill in the blank 227371fe4fa8075_83%	fill in the blank 227371fe4fa8075_84%	fill in the blank 227371fe4fa8075_85%	fill in the blank 227371fe4fa8075_86%	fill in the blank 227371fe4fa8075_87%	fill in the blank 227371fe4fa8075_88%

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 Products	Cat Japan	Core Components	Earthmoving	Electric Power	Excavation	Large Power Systems	Logistics	Marine and Petroleum Power	Mining	Turbines
Manufacturing margin	fill in the blank 77b2f0f1d006fc3_1%	fill in the blank 77b2f0f1d006fc3_2%	fill in the blank 77b2f0f1d006fc3_3%	fill in the blank 77b2f0f1d006fc3_4%	fill in the blank 77b2f0f1d006fc3_5%	fill in the blank 77b2f0f1d006fc3_6%	fill in the blank 77b2f0f1d006fc3_7%	fill in the blank 77b2f0f1d006fc3_8%	fill in the blank 77b2f0f1d006fc3_9%	fill in the blank 77b2f0f1d006fc3_10%	fill in the blank 77b2f0f1d006fc3_11%
Dealer commissions	fill in the blank 77b2f0f1d006fc3_12%	fill in the blank 77b2f0f1d006fc3_13%	fill in the blank 77b2f0f1d006fc3_14%	fill in the blank 77b2f0f1d006fc3_15%	fill in the blank 77b2f0f1d006fc3_16%	fill in the blank 77b2f0f1d006fc3_17%	fill in the blank 77b2f0f1d006fc3_18%	fill in the blank 77b2f0f1d006fc3_19%	fill in the blank 77b2f0f1d006fc3_20%	fill in the blank 77b2f0f1d006fc3_21%	fill in the blank 77b2f0f1d006fc3_22%
Variable promotion expenses	fill in the blank 77b2f0f1d006fc3_23%	fill in the blank 77b2f0f1d006fc3_24%	fill in the blank 77b2f0f1d006fc3_25%	fill in the blank 77b2f0f1d006fc3_26%	fill in the blank 77b2f0f1d006fc3_27%	fill in the blank 77b2f0f1d006fc3_28%	fill in the blank 77b2f0f1d006fc3_29%	fill in the blank 77b2f0f1d006fc3_30%	fill in the blank 77b2f0f1d006fc3_31%	fill in the blank 77b2f0f1d006fc3_32%	fill in the blank 77b2f0f1d006fc3_33%
Contribution margin ratio	fill in the blank 77b2f0f1d006fc3_34%	fill in the blank 77b2f0f1d006fc3_35%	fill in the blank 77b2f0f1d006fc3_36%	fill in the blank 77b2f0f1d006fc3_37%	fill in the blank 77b2f0f1d006fc3_38%	fill in the blank 77b2f0f1d006fc3_39%	fill in the blank 77b2f0f1d006fc3_40%	fill in the blank 77b2f0f1d006fc3_41%	fill in the blank 77b2f0f1d006fc3_42%	fill in the blank 77b2f0f1d006fc3_43%	fill in the blank 77b2f0f1d006fc3_44%

c. All of the following are contributing reasons that Cat Japan is the poorest performing segment except:

1. The manufacturing margin as a percentage of sales is the lowest.
2. The dealer commissions as a percentage of sales are the highest.
3. The variable promotion expenses as a percentage of sales are the highest.
4. The variable cost of goods sold as a percentage of sales is the highest.
5. None of these choices is correct.

The correct answer is: