Losses have been incurred at Millard Corporation for some time. In an effort to isolate the problem and improve the company’s performance, management has requested that the monthly income statement be segmented by sales region. The company’s first effort at preparing a segmented statement is given below. This statement is for May, the most recent month of activity. Sales Region West Central East Sales $ 311,000 $ 803,000 $ 699,000 Regional expenses (traceable): Cost of goods sold 95,000 243,000 317,000 Advertising 103,000 244,000 235,000 Salaries 52,000 51,000 107,000 Utilities 8,800 15,600 14,400 Depreciation 25,000 31,000 27,000 Shipping expense 12,000 29,000 39,000 Total regional expenses 295,800 613,600 739,400 Regional income (loss) before corporate expenses 15,200 189,400 (40,400 ) Corporate expenses: Advertising (general) 16,000 39,000 35,000 General administrative expense 21,000 21,000 21,000 Total corporate expenses 37,000 60,000 56,000 Net operating income (loss) $ (21,800 ) $ 129,400 $ (96,400 ) Cost of goods sold and shipping expense are both variable; other costs are all fixed. Millard Corporation is a wholesale distributor of office products. It purchases office products from manufacturers and distributes them in the three regions given above. The three regions are about the same size, and each has its own manager and sales staff. The products that the company distributes vary widely in profitability. Required: 3. Prepare a new contribution format segmented income statement for May. Show a Total column as well as data for each region. In addition, for the company as a whole and for each sales region, show each item on the segmented income statement as a percent of sales. (Note: % columns may not total due to rounding.) Round percentage answers to 1 decimal place (i.e .1234 should be entered as 12.3). Total Company West Central East Amount % Amount % Amount % Amount % Variable expenses: Total variable expenses Traceable fixed expenses: Total traceable fixed expenses Common fixed expenses: Total common fixed expense Net operating income (loss)

Losses have been incurred at Millard Corporation for some time. In an effort to isolate the problem and improve the company’s performance, management has requested that the monthly income statement be segmented by sales region. The company’s first effort at preparing a segmented statement is given below. This statement is for May, the most recent month of activity. Sales Region West Central East Sales $ 311,000 $ 803,000 $ 699,000 Regional expenses (traceable): Cost of goods sold 95,000 243,000 317,000 Advertising 103,000 244,000 235,000 Salaries 52,000 51,000 107,000 Utilities 8,800 15,600 14,400 Depreciation 25,000 31,000 27,000 Shipping expense 12,000 29,000 39,000 Total regional expenses 295,800 613,600 739,400 Regional income (loss) before corporate expenses 15,200 189,400 (40,400 ) Corporate expenses: Advertising (general) 16,000 39,000 35,000 General administrative expense 21,000 21,000 21,000 Total corporate expenses 37,000 60,000 56,000 Net operating income (loss) $ (21,800 ) $ 129,400 $ (96,400 ) Cost of goods sold and shipping expense are both variable; other costs are all fixed. Millard Corporation is a wholesale distributor of office products. It purchases office products from manufacturers and distributes them in the three regions given above. The three regions are about the same size, and each has its own manager and sales staff. The products that the company distributes vary widely in profitability. Required: 3. Prepare a new contribution format segmented income statement for May. Show a Total column as well as data for each region. In addition, for the company as a whole and for each sales region, show each item on the segmented income statement as a percent of sales. (Note: % columns may not total due to rounding.) Round percentage answers to 1 decimal place (i.e .1234 should be entered as 12.3). Total Company West Central East Amount % Amount % Amount % Amount % Variable expenses: Total variable expenses Traceable fixed expenses: Total traceable fixed expenses Common fixed expenses: Total common fixed expense Net operating income (loss)

College Accounting (Book Only): A Career Approach

13th Edition

ISBN:9781337280570

Author:Scott, Cathy J.

Publisher:Scott, Cathy J.

ChapterE: Departmental Accounting

Section: Chapter Questions

Problem 3P

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Question

	Sales Region
	West	Central	East
Sales	$	311,000		$	803,000	$	699,000
Regional expenses (traceable):
Cost of goods sold		95,000			243,000		317,000
Advertising		103,000			244,000		235,000
Salaries		52,000			51,000		107,000
Utilities		8,800			15,600		14,400
Depreciation		25,000			31,000		27,000
Shipping expense		12,000			29,000		39,000
Total regional expenses		295,800			613,600		739,400
Regional income (loss) before corporate expenses		15,200			189,400		(40,400	)
Corporate expenses:
Advertising (general)		16,000			39,000		35,000
General administrative expense		21,000			21,000		21,000
Total corporate expenses		37,000			60,000		56,000
Net operating income (loss)	$	(21,800	)	$	129,400	$	(96,400	)

Cost of goods sold and shipping expense are both variable; other costs are all fixed. Millard Corporation is a wholesale distributor of office products. It purchases office products from manufacturers and distributes them in the three regions given above. The three regions are about the same size, and each has its own manager and sales staff. The products that the company distributes vary widely in profitability.

Required:

3. Prepare a new contribution format segmented income statement for May. Show a Total column as well as data for each region. In addition, for the company as a whole and for each sales region, show each item on the segmented income statement as a percent of sales. (Note: % columns may not total due to rounding.) Round percentage answers to 1 decimal place (i.e .1234 should be entered as 12.3).

	Total Company	West	Central	East
	Amount	%	Amount	%	Amount	%	Amount	%

Variable expenses:




Total variable expenses

Traceable fixed expenses:






Total traceable fixed expenses

Common fixed expenses:




Total common fixed expense
Net operating income (loss)

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