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

Management wants to improve profits and gathered the following data:

a$.$ The company is divided into two sales territories$-$Northern and Southern. The Northern Territory recorded

$$400,000$ in sales and $$200,000$ in variable expenses during June; the remaining sales and variable expenses

were recorded in the Southern Territory. Fixed expenses of $$172,000$ and $$135,000$ 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

$$200,000$ and $$200,000,$ respectively, in the Northern territory during June. Variable expenses are $26\%$ of the

selling price for Paks and $74\%$ for Tibs. Cost records show $$94,000$ of the Northern Territory's fixed expenses are

traceable to Paks and $$42,000$ 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.