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A . The company plans to intiatw an advertising campaign for one of the two products in division 1 . The campaign will be cost

A. The company plans to intiatw an advertising campaign for one of the two products in division 1. The campaign will be cost $10,000 per month and is expected to increase the sale of whichever product is advertised by $30,000 per month. Compute the expected increase in our responsibility margin of Division 1 assuming that (1) product A is advertised and (2) that product B is advertised.
B. Assume at the sales are both products by division 1 are equal to the total manufacture capacity. To increase sales of either product, the company must increase manufacturing facilities, which means an increase in traceable fixed cost in approximate proportion to the expected increase in sales. In this case, which product line would you recommend expanding? Explain.
C. The income statement for division one includes $21,000 in common fix cost. What happens he fixed costs in the income statement for Butterfield, Inc.?
D. Assume that in April the monthly sale in division two increased to $200,000.Compute the expected effect of this change on the operating income of the company (assume no other changes in revenue or cost behavior).
E. Prepare an income statement for Butterfield, inc., by division, under the assumption stated in part D.organizes income statement in the format illustrated, include comms for percentages.PROBLEM 22.5A
Analysis of Responsibility Income Statements
The following are responsibility income statements for Butterfield, Inc., for the month of March.
\table[[,Investment Centers],[,Butterfleld, Inc.,Division 1,Dil ,\table[[%
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