Vega Foods Inc. has recently purchased a small mill that it intends to operate

Vega Foods Inc. has recently purchased a small mill that it intends to operate as one of its subsidiaries. The newly acquired mill has three
products that it offers for sale%u2014wheat cereal pancake mix and flour. Each product sells for $10 per package. Materials labor and other
variable production costs are $4.40 per bag of wheat cereal $5.60 per bag of pancake mix and $3.20 per bag of flour. Sales commissions are
10% of sales for any product. All other costs are fixed.

Product Line

The same equipment is used to mill and package all three products. In the above income statement equipment depreciation has been allocated on
the basis of sales dollars. An analysis of equipment usage indicates that it is used 30% of the time to make wheat cereal 60% of the time to
make pancake mix and 10% of the time to make flour.

All three products are stored in the same warehouse. In the above income statement the warehouse rent has been allocated on the basis of sales
dollars. The warehouse contains 40800 square feet of space of which 8000 square feet are used for wheat cereal 14000 square feet are used
for pancake mix and 18800 square feet are used for flour. The warehouse space costs the company $0.50 per square foot per month to rent.

The general administration costs relate to the administration of the company as a whole. In the above income statement these costs have been
divided equally among the three product lines.

All other costs are traceable to the product lines.

Prepare a new contribution format segmented income statement for the month. Adjust the allocation of equipment depreciation and warehouse rent
as indicated by the additional information provided. (Input all amounts as positive values except losses which should be
indicated by a minus sign. Round your final answers to the nearest dollar amount.)
(Click to select) Sales commissions General administration Contribution margin Net operating income (loss) Sales Materials labor & other Advertising Salaries (Click to select) Contribution margin Net operating income (loss) Materials labor and other Advertising Equipment depreciation Salaries Sales General administration (Click to select) Sales Net operating income (loss) Advertising Sales commissions Salaries General administration Equipment depreciation Contribution margin (Click to select) Contribution margin Gross margin (Click to select) Materials labor & other Product line segment margin Sales commissions Contribution margin Net operating income (loss) General administration Sales Advertising (Click to select) General administration Salaries Net operating income (loss) Materials labor & other Product line segment margin Contribution margin Sales commissions Sales (Click to select) Equipment depreciation Materials labor & other Sales commissions Sales Net operating income (loss) Contribution margin General administration Product line segment margin (Click to select) Materials labor & other Sales commissions General administration Net operating income (loss) Product line segment margin Sales Warehouse rent Contribution margin (Click to select) Advertising Product line segment margin Contribution margin Materials labor & other Sales commissions Sales commissions Net operating income (loss) Sales Salaries (Click to select) Salaries Sales General administration Materials labor & other Advertising Sales commissions Contribution margin Equipment depreciation (Click to select) Net operating loss Net operating income
After seeing the income statement in the main body of the problem management has decided to eliminate the wheat cereal because it is not
returning a profit and to focus all available resources on promoting the pancake mix.