QUESTION I - LO 6 (10 Marks) - Responsibility Analysis Note to students - as this is now an open-book assignment, students will need to develop the segmented statements - temptate ts not provided. Tennessee Company is geographically segmented into two divisions - East and West. The company's income statement for the last month is presented below: Total Division Company West % sales East Sales sales $8,500,000 $4,675,000 $3.825.000 3,395,750 1,636,250 1,759,500 $5,104,250 60% $3,038.750 65% $2,065,500 54% Sales Variable expenses Contribution margin Total Fixed expenses Net income 3.825.000 45% 1.912.500 415 1912.500 50% $1,279.250 15% $1,126,250 24% $153,000 Management is concerned with the reported results, especially the East Division's net income results in relation to the net income results of the West Division. They have asked you to examine the East Division in relation to West Division and further to examine the East Division to determine if any of the three product lines are causing the low level of profitability in that division. You have been provided the following additional information: Of the total fixed expenses reported above, management has determined that 30% are traceable to the East Division, 55% are traceable to the West Division. The remaining fixed expenses are common to both divisions. The East provided the following respecting the three product lines: Product Line Fruit Drinks Flavoured Cola Water Sales $1,147,500 $1,721,250 $956,250 Traceable fixed expenses Administration 103,275 103,275 51,638 Advertising 255,606 139,421 69.711 Depreciation 123,930 154,913 30,983 Variable Expenses 351,900 615,825 791,775 The remaining fixed costs for the East Division are common to all product lines. information. 2. What observations and recommendations would you make to management based on your analysis? Be sure to integrate your analysis