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Help please A. Fleck & Company, a wholesale distributor of novelty toys, has been experiencing losses for some time, as shown by its most recent
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A. Fleck & Company, a wholesale distributor of novelty toys, has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement $2,110,000 915, 130 Sales Variable expenses Contribution margin Fixed expenses 1,194,820 1,327,000 Operating loss $ (112,180) 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 $611,000 60% $320,000 Central $810,000 32% $531,000 North $689,000 42% $311,000 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 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 Step by Step Solution
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