Alto Company is evaluating its two divisions, North American Division and European Division.Data for the North American Division include sales of $2,400,000, variable costs of $1,600,000, and fixed costs of $900,000, 70% of which are traceable to the division.European Division's data include sales of $1,700,000, variable costs of $900,000 and fixed costs of $650,000, 50% of which are traceable to the division.

Required (11marks):

a) segmented income statement showing the details for the divisions and the company as a whole. Use a format that is useful for decision-making. (7 marks)

b) Should either of the divisions be considered for elimination? Explain. (1 mark)

c) The company's sales manager believes that sales volume in theNorth American Divisioncould be increased by 10% if advertising was increased by $50,000.Would you recommend the increased advertising?Show calculations. (3 marks)