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Problem 22.5A (Algo) Analysis of Responsibility Income Statements (L022-3, LO22-4, LO22-5) Shown as follows are responsibility Income statements for Butterfield, Inc., for the month of

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Problem 22.5A (Algo) Analysis of Responsibility Income Statements (L022-3, LO22-4, LO22-5) Shown as follows are responsibility Income statements for Butterfield, Inc., for the month of March Investment Centers Sales Variable costs Contribution margin Fixed costs traceable to divisions Division responsibility margin Common fixed costs Income from operations Butterfield TIK Division 1 Division 2 Dollars DO Dollars $ 450,000 100.com S 300,000 100% $ 150,000 100% 225,000 50.00 150,000 60 45.000 30 $ 225,000 50.005 120,000 40 105,000 70x 135.000 30. 63,000 21 72.00 48 $ 90,000 20.00 $ 57,000 196 $ 33,000 40,000 $ 50,000 11.11% no Sales Variable costs Contribution margin Fixed costs traceable to products Product responsibility margin Coonon fixed costs Responsibility margin for division Profit Centers Division 1 Product Products Dollars Dollars Dollars $ 300,000 100% S120,000 180.00% $ 180,000 100.00% 150,000 GO 54.ee 45.00 126,690 70.00 $ 120,000 40$ 66,000 55.00% 54.000 32.00 42,000 14 12, Goe 10.se 16.30 $ 78,000 26 $ 53,400 44.5er $ 24.600 13.67% 21,000 2 $57.000 197 Required: a. The company plans to Inltate an advertising campaign for one of the two products in Division 1. The campaign would cost $2.000 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 B is 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 Required The company plans to initiate an advertising campaign for one of the two products in Division 1. The campaign would cost 52.000 per month and is expected to increase the sales of whichever product is advertised by 540,000 per month. Compute the expected increase in the responsibility margin of Division 1 assuming that (1) product A is advertised and (2) product B is advertised Expected Change in Responsibility Margin Product PB

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