Problem 1. Sterl Company, a wholesale distributor of DVDs, has been experiencing losses for some time, as shown by its most recent monthly income statement below: Sales Less: Variable expenses Contribution Margin Less: fixed cost Net operating loss 1,500,000 588,000 912,000 945,000 (33,000) In an effort to isolate the problem, the president has asked for an income statement segmented by geographical market. Accordingly, the accounting department has developed the following data: Sales Variable expenses as a percentage of sales Traceable fixed expenses East 400,000 52% 240,000 Central 600,000 30% 330,000 West 500,000 40% 200,000 Required: a. Prepared an income statement segmented by geographical market as desired by the president. b. The company's sales manager believes that sales in Central market could be increased by 15% if advertising were increased by P25,000 per month. Would you recommend the increased advertising? Show computation to support your