Vulcan Company$$s contribution format income statement for June is as follows:

Vulcan Company

Income Statement

For the Month Ended June $30$

Sales $ $750,000$

Variable expenses $336,000$

Contribution margin $414,000$

Fixed expenses $378,000$

Net operating income $ $36,000$

Management wants to improve profits and gathered the following data:

The company is divided into two sales territories$$Northern and Southern. The Northern territory recorded $$300,000$ in sales and $$156,000$ in variable expenses during June; the remaining sales and variable expenses were recorded in the Southern territory. Fixed expenses of $$120,000$ and $$108,000$ are traceable to the Northern and Southern territories, respectively. The rest of the fixed expenses are common to the two territories.

The company is the exclusive distributor for two products$$Paks and Tibs. Sales of Paks and Tibs totaled $$50,000$ and $$250,000,$ respectively, in the Northern territory during June. Variable expenses are $22\%$ of the selling price for Paks and $58\%$ for Tibs. Cost records show $$30,000$ of the Northern territory$$s fixed expenses are traceable to Paks and $$40,000$ to Tibs, with the remainder common to the two products.

Required:

$1-$a$.$ Prepare contribution format income statements for the total company segmented by sales territories.

$1-$b$.$ Prepare contribution format income statements for the Northern Territory segmented by product line.