Vulcan Company's contribution format income statement for June is as follows: Vulcan Company Income Statement For the Month Ended June 30 Sales $ 900,000 400,000 500,000 475,000 Variable expenses Contribution margin Fixed expenses $ 25,000 Net operating income 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 territories-Northern and Southern. The Northern Territory recorded $400,000 in sales and $160,000 in variable expenses during June; the remaining sales and variable expenses were recorded in the Southern Territory Fixed expenses of $176,000 and $140,000 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 $140,000 and $260,000, respectively, in the Northern territory during June. Variable expenses are 27% of the selling price for Paks and 47% for Tibs. Cost records show that $67.200 of the Northern Territory's fixed expenses are traceable to Paks and $57,200 to Tibs, with the remainder common to the two products. Prepare contribution format segmented income statements for the total company broken down between sales territories. (Round your percentage answers to 1 decimal place (i.e. 0.1234 should be entered as 12.3).) Sales Territory Total Company Northern Southern Amount Amount Amount s 900,000100.0 Sales 44.0 Variable expenses 400,000 0.0 Contribution margin 500,000 56.0 0.0 Traceable fixed 316,000 expenses Territorial segment 0.0 0.0 184,000 56.0S margin Common fixed 159,000 expenses Net operating income S 25,000 56.0 Req 1A Req 1B> Required 1-a. Prepare contribution format segmented income statements for the total company broken down between sales territories 1-b. Prepare contribution format segmented income statements for the Northern Territory broken down by product line Answer is not complete. Complete this question by entering your answers in the tabs below Req 1A Req 1B Prepare contribution format segmented income statements for the Northern Territory broken down by product line. (Round your percentage answers to 1 decimal place (i.e. 0.1234 should be entered as 12.3).) Product Line Paks Northern Territory Tibs Amount Amount Amount s 500,000 Sales Variable expenses 0.0 Contribution margin 500,000 0.0 0.0 Traceable fixed expenses Product line segment margin 500,000 0.0 0.0 0.0 Common fixed expenses $ 500,000 Sales territory segment margin 0.0
