10 points skipped eBuuk Print R'eterences Profit Centers Division 1 Product A Product B Dollars 9.; Dollars 9.; Dollars 9.; Sales $330,000 100% $132,000 100. 0096 $ 198,000 100.00% Variable costs 198,000 60 59,400 45.00 138,600 70.00 Contribution margin $132,000 4096 $ 72,600 55.00% $ 59,400 30.00% Fixed costs traceable to products 46,200 14 13,860 10.50 32,340 16.33 Product responsibility margin $ 85,800 26% $ 58,740 44-50% $ 27,060 13-67% Common fixed costs 23,100 7 Responsibility margin for division $ 62.700 19% Required: a. The company plans to initiate an advertising campaign for one ofthe two products in Division 1. The campaign would cost $4,000 per month and is expected to increase the sales of whichever product is advertised by $30,000 per month. Compute the expected increase in the responsibility margin of Division 1 assuming that (1) product A is advertised and (2) product B is advertised. e. Prepare an income statement for Butterfield, Inc., by division, underthe assumption that in April the monthly sales in Division 2 increase to $190,000. 10 Shown as follows are responsibility income statements for Butterfield, Inc., for the month of March. points Investment Centers Skipped Butterfield, Inc Division 1 Division 2 Dollars % Dollars Dollars % Sales $ 500, 000 100.00% $ 330, 000 100% $ 170, 000 100% eBook Variable costs 249, 000 49.80 198, 000 60 51, 000 30 Contribution margin $ 251, 000 50.20% $ 132, 000 40% $ 119, 000 70% Print Fixed costs traceable to divisions 150 , 900 30. 18 69, 300 21 81, 600 48 $ 62, 700 19% 22% References Division responsibility margin $ 100, 100 20.02% $ 37, 400 Common fixed costs 50, 000 10.00 Income from operations $ 50, 100 10.02%