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Banner Company, a distributor of radioactive isotopes, has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement
Banner Company, a distributor of radioactive isotopes, has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement Sales Variable expenses $2,200,000 872,500 Contribution margin Fixed expenses 1,327,500 1,345,000 Operating loss 5 (17,500) In an effort to isolate the problem, the president has asked for an income statement segmented by geographic market. Accordingly. the Accounting Department has developed the following: Geographic Market Sales Variable expenses as a percentage of sales Traceable fixed expenses South $620,000 52% $360,000 Central $819,000 30% $529,000 North $761,000 40% $320,000 Required: 1. Prepare a contribution format income statement segmented by geographic market, as requested by the president Required: 1. Prepare a contribution format income statement segmented by geographic market, as requested by the president. Geographic Market Central Total Company South North $ 0 0 0 0 $ 0 $ 0 Os 0 $ 0 2-0. The company's sales manager believes that sales in the Central geographic market could be increased by 15% if monthly advertising is increased by $45,000. Calculate the incremental net operating income. Incremental net operating income 2-a. The company's sales manager believes that sales in the Central geographic market could be increased by 15% of monthly advertising is increased by $45,000. Calculate the incremental net operating income Incremental net operating income 2-b. Would you recommend the increased advertising? Yes O No
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