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PLEASE SOLVE ASAP FOR POSITVE RATING Bovine Company, a wholesale distributor of umbrellas, has been experiencing losses for some time, as shown by its most
PLEASE SOLVE ASAP FOR POSITVE RATING
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: $2,140,000 952,220 Sales Variable expenses Contribution margin Fixed expenses 1,187,780 1,333,000 Operating loss $ (145,220) 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 as a percentage of sales Traceable fixed expenses Geographic Market South Central North $614,000 $813,000 $713,000 54% 36% 46% $304,000 $503,000 $314,000 Required: 1. Prepare a contribution format income statement segmented by geographic market, as requested by the president. Total Company Geographic Market Central South North $ CA 0 0 0 0 0 HA 0 $ 0 $ 0 $ 0 0 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 $39,000. Calculate the incremental net operating income. Incremental net operating income 2-b. Would you recommend the increased advertising? O YesStep by Step Solution
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