Question #1: Company, a wholesale distributor of sandals, 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 Sales Variable expenses as a percentage of sales Traceable fixed expenses In an effort to isolate the problem, the president has asked for an income statement separate by geographic market. Accordingly, the Account Department has developed the following information: South 1,150,000 475,000 345,000 55% 172,500 675,000 690,000 (15,000) Geographic Market Central 460,000 25% 276,000 North 345,000 35% 138,000 Required 1. Prepare a contribution format income statement segmented by geographic market. 2. The company's sales manager believes that sales in the Central geographic market could be increased by 15% if monthly advertising is increased by $13,000. Would you recommend the increased advertising? Show computations to support your answer.

Question \#1: Company, a wholesale distributor of sandals, has been experiencing losses for some time as shown by its most recent monthly contribution format income statement. In an effort to isolate the problem, the president has asked for an income statement separate by geographic market. Accordingly, the Account Department has developed the following information: Required 1. Prepare a contribution format income statement segmented by geographic market. 2. The company's sales manager believes that sales in the Central geographic market could be increased by 15% if monthly advertising is increased by $13,000. Would you recommend the increased advertising? Show computations to support your