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

Management is disappointed with the company's performance and is wondering what can be done to improve profits. By examining

sales and cost records, you have determined the following:

a$.$ The company is divided Into two sales territorles$-$Northern and Southern. The Northern Territory recorded $$400,000$ In sales and

$$216,000$ in varlable expenses during June; the remaining sales and varlable expenses were recorded In the Southern Territory.

Fixed expenses of $$152,000$ and $$96,000$ are traceable to the Northern and Southern Territorles, respectlvely. The rest of the fixed

expenses are common to the two territorles.

b$.$ The company is the exclusive distributor for two products$-$Paks and Tibs. Sales of Paks and Tibs totaled $$100,000$ and $$300,000,$

respectively, In the Northem territory during June. Varlable expenses are $15\%$ of the selling price for Paks and $67\%$ for Tibs. Cost

records show that $$51,000$ of the Northern Territory's fixed expenses are traceable to Paks and $$72,000$ to Tibs, with the remalnder

common to the two products.

Required:

$1-$a$.$ Prepare contribution format segmented income statements for the total company broken down between sales territorles.

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

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