er 22 Practice Problems Sales Variable costs Contribution margin Fixed costs traceable to divisions Division responsibility margin Connon fixed costs Income from operations Investment Centers Butterfield, Inc Division 1 Division 2 Dollars Dollars Dollars $ 480, cee 100.00 330,000 100% $ 150,00 100 243.ee 50.63 198,000 60 45,00 30 $ 237,000 49.38* $ 132,000 405 105,000 705 141,300 29.44 69,300 21 72,00 48 $ 95,700 19.941 $ 62,700 194 $ 33,00 224 40,000 8.33 $ 55,700 11.60 ped int Profit Centers Division 1 Product A Product B Dollars Dollars Dollars $ 330,000 100% $ 132,000 100.004 $198.00 zee. 298,000 60 59,400 45.ee 138,62 78.00 $ 132,000 484 572,600 55.00 559,482 30.005 46,200 14 13,860 10.50 32,340 16.33 $ 85,800 25 $ 58,740 44.50 $ 27,060 13.67 23, 10e 7 $ 62,700 194 Sales Variable costs Contribution margin Fixed costs traceable to products Product responsibility margin Connon fixed costs Responsibility margin for division ences Required: a. The company plans to initiate an advertising campaign for one of the two products in Division 1 The campaign would cost $5,000 per month and is expected to increase the sales of whichever product is advertised by $40,000 per month Compute the expected increase in the responsibility margin of Division 1 assuming that (1) product A is advertised and (2) product Bis advertised e. Prepare an income statement for Butterfield, Inc., by division, under the assumption that in April the monthly sales in Division 2 Increase to $170,000 Complete this question by entering your answers in the tabs below. Required A Required E The company plans to initiate an advertising campaign for one of the two products in Division 1. The campaign would cost $5,000 per month and is expected to increase the sales of whichever product is advertised by $40,000 per month. Compute the expected increase in the responsibility margin of Division 1 assuming that (1) product A is advertised and (2) product is advertised. Expected Change in Responsibility Margin Product A Product B Required) uce Problems Sales Variable costs Contribution margin Fixed costs traceable to products Product responsibility margin Connon fixed costs Responsibility margin for division Profit Centers Division 1 Product A Product B Dollars Dollars Dollars $ 330,000 1804 $ 132,000 100.00 $ 198,000 100.000 198,000 60 59,400 45.00 138,600 70.00 $ 132,000 48% $ 72,600 55.889 $ 59,480 30.se 46,200 14 13,860 10.50 32,340 16.33 $ 85,800 26% $ 58,740 44.589 $ 27,060 13.67% 23, 100 7 $ 62,700 194 Required: a. The company plans to initiate an advertising campaign for one of the two products in Division 1. The campaign would cost $5,000 per month and is expected to increase the sales of whichever product is advertised by $40,000 per month. Compute the expected increase in the responsibility margin of Division 1 assuming that (0 product Ais advertised and (2) product Bis advertised. e. Prepare an income statement for Butterfield, Inc., by division, under the assumption that in April the monthly sales in Division 2 increase to $170,000 Complete this question by entering your answers in the tabs below. Required A Required E Prepare an income statement for Butterfield, Inc., by division, under the assumption that in April the monthly sales in Division 2 increase to $170,000. (Round your percentage answers to 2 decimal place (.e. 0.1234 should be considered as 12.34%).) BUTTERFIELD, INC Responsibility Income Statement For April Butterfield, Inc. Division 1 Dollars Percent Dollars Percent % % % % % % % % % % % % Division 2 Dollars Percent % % % % %
