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 $2,110,000 915,180 Variable expenses Contribution margin Fixed expenses 1,194,820 1,327,000 Operating loss. $ (132,180) 01:31:34 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: eBook Sales. 7 Geographic Market Central North $810,000 $689,000 32% 42% $531,000 $311,000 South $611,000 60% $320,000 Variable expenses as a percentage of sales Traceable fixed expenses Print Required: 1. Prepare a contribution format income statement segmented by geographic market, as requested by the president. Geographic Market Central Total South Company Sales S 2,110,000 $ 611,000 $ 689,000 810,000 $ 259,200 Variable expenses 915,180 366,600 289,380 Contribution margin $ 1,194,820 550,800 399,620 244,400 320,000 Traceable fixed expenses 531,000 311,000 Geographic market segment margin S $ (75,600) $ 19,800 $ 88,620 ******************************** 1,152,000 42,820 165,000 (122,180) Common fixed expenses not traceable to geographic markets Operating loss $ 2-a. The company's sales manager believes that sales in the Central geographic market could be increased by 15% if monthly advertising is increased by $36,000. Calculate the incremental net operating income. Incremental net operating income 6 13 points North 2-a. The company's sales manager believes that sales in the Central geographic market could be increased by 15% if monthly advertising is increased by $36,000. Calculate the incremental net operating income. Incremental net operating income 2-b. Would you recommend the increased advertising? Yes No