Vulcan Companys contribution format income statement for June is as follows:

Vulcan Company

Income Statement

For the Month Ended June

Sales $

Variable expenses

Contribution margin

Fixed expenses

Net operating income $

Management is disappointed with the companys performance and is wondering what can be done to improve profits. By examining sales and cost records, you have determined the following:

The company is divided into two sales territoriesNorthern and Southern. The Northern Territory recorded $ in sales and $ in variable expenses during June; the remaining sales and variable expenses were recorded in the Southern Territory. Fixed expenses of $ and $ 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 productsPaks and Tibs. Sales of Paks and Tibs totaled $ and $ respectively, in the Northern territory during June. Variable expenses are of the selling price for Paks and for Tibs. Cost records show that $ of the Northern Territorys fixed expenses are traceable to Paks and $ to Tibs, with the remainder common to the two products.

Required:

a Prepare contribution format segmented income statements for the total company broken down between sales territories.

b Prepare contribution format segmented income statements for the Northern Territory broken down by product line.