Bovine Company, a wholesale distributor of umbrellas, has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement: Sales Variable expenses $2,120,000 915,740 Contribution margin Fixed expenses 1,204,260 1,329,000 Operating loss $ (124,740) 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 $612,000 52% $321,000 Central $811,000 35% $501,000 North $697,000 45% $312,000 Required: 1. Prepare a contribution format income statement segmented by geographic market, as requested by the president. Geographic Market Total Company South Central North 2-a. The company's sales manager believes that sales in the Central geographic market could be increased by 14% if monthly advertising is increased by $37,000. Calculate the incremental net operating income. Incremental net operating income 2-b. Would you recommend the increased advertising? Yes