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

Vulcan CompanyIncome StatementFor the Month Ended June $30$Sales$ $900,000$Variable expenses$408,000$Contribution margin$492,000$Fixed expenses$465,000$Net operating income$ $27,000$

Management wants to improve profits and gathered the following data:

The company is divided into two sales territories$$Northern and Southern. The Northern Territory recorded $$400,000$ in sales and $$168,000$ in variable expenses during June; the remaining sales and variable expenses were recorded in the Southern Territory. Fixed expenses of $$212,000$ and $$130,000$ 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 products$$Paks and Tibs. Sales of Paks and Tibs totaled $$200,000$ and $$200,000,$ respectively, in the Northern territory during June. Variable expenses are $25\%$ of the selling price for Paks and $59\%$ for Tibs. Cost records show $$90,000$ of the Northern Territory$$s fixed expenses are traceable to Paks and $$40,000$ 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. 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 $\backslash (\backslash$$ $400,000\backslash )$ in sales and $\backslash (\backslash$$ $168,000\backslash )$ in variable expenses during June; the remaining sales and variable expenses were recorded in the Southern Territory. Fixed expenses of $\backslash (\backslash$$ $212,000\backslash )$ and $\backslash (\backslash$$ $130,000\backslash )$ 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 $\backslash (\backslash$$ $200,000\backslash )$ and $\backslash (\backslash$$ $200,000\backslash ),$ respectively, in the Northern territory during June. Variable expenses are $\backslash (25\backslash \%\backslash )$ of the selling price for Paks and $\backslash (59\backslash \%\backslash )$ for Tibs. Cost records show $\backslash (\backslash$$ $90,000\backslash )$ of the Northern Territory's fixed expenses are traceable to Paks and $\backslash (\backslash$$ $40,000\backslash )$ 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.

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