Regal Flair Enterprises has two product linesjewelry and women's apparel. Cost and revenue data for each product line for the current month are as follows.

Product Lines

JewelryApparel

Sales$900,000$400,000

V.Costs as percentage of sales40%30%

F. Costs as percentage of sales

Traceable to product lines225,000240,000

In addition to the costs shown, the company incurs monthly fixed costs of $130,000 common to both product lines.

Required:

What is Regal Flair Enterprises's responsibility income statement for the current month. Report the responsibility margin for each product line and income from operations for the company as a whole.

b1 the marketing survey shows that a $80,000 monthly advertising campaign focused on either product line should increase that product line's monthly sales by approximately $120,000.

c-1.Management is considering expanding one of the company's two product lines. An investment of a given dollar amount is expected to increase the sales of the expanded product line by $300,000. It is also expected to increase the traceable fixed costs of the expanded product line by 70 percent.