ook int ences 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 Contribution margin Fixed expenses Operating loss $2,010,000 796,120 1,213,880 1,307,000 $ (93,120) 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: Sales Variable expenses an a percentage of sales Traceable fixed expenses Required: South $601,000 52 309 Geographic Market Central North $800,000 $609,000 40 $321,000 $531,000 $301,000 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 10% if monthly advertising is increased by $26,000. Calculate the incremental net operating income. Incremental net operating income 2-b. Would you recommend the increased advertising? Yes ONO