Sales Variable costs Contribution margin Fixed costs traceable to divisions Division responsibility margin Common fixed costs Income from operations Investment Centers Butterfield, Inc Division 1 Division 2 Dollars % Dollars Dollars $ 450,000 100.00% $ 320,000 100% $ 130,000 100x 231,000 51.33 192,800 6e 39,000 30 $ 219,000 48.67% $ 128,000 40% $ 91,000 70% 129,609 28.80 67,200 21 62,400 48 $ 89,400 19.82% 5 68,888 19% $ 28,600 22x 40.oee 8.89 $ 49,480 10.98% Sales Variable costs Contribution margin Fixed costs traceable to products Product responsibility margin Common fixed costs Responsibility margin for division Profit Centers Division 1 Product A Products Dollars Dollars X Dollars $ 320,000 100% $ 128,000 100.00% $ 192,000 100.00% 192,000 60 52,600 45.00 134,400 70.00 $ 120,000 40% 570,400 55.00 $ 57.600 30.00% 44,800 14 13,440 10.50 31,360 16.33 $ 83,200 26% $ 56,960 44.50% 526,240 13.67% 22,400 Z $ 60,800 19% Required: a. The company plans to initiate an advertising campaign for one of the two products in Division 1. The campaian would cost $4.00 Required: 6. The company plans to initiate an advertising campaign for one of the two products in Division 1. The campaign would cost $4,000 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 $150,000 Complete this question by entering your answers in the tabs below. Required A Required E Complete this question by entering your answers in the tabs below. Required A Required E The company plans to initiate an advertising campaign for one of the two products in Division 1. The campaign would cost $4,000 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. Expected Change in Responsibility Margin Product A Product B Required E > Required A Required E Prepare an income statement for Butterfield, Inc., by division, under the assumption that in April the monthly salen in Division 2 increase to $150,000. (Round your percentage answers to 2 decimal place (1., 0.1234 should be considered as 12.34%):) BUTTERFIELD INC Responsibility Income Statement For April Butteeld, Inc Division 1 Dollar Porcent Dollars Porcent % Division 2 Dollar Porcent 1% % $ 0 0.00% % % $ 0 5 0 0.00% * 0.00 % 0.001 0.00% % 0.00% 0 $ 0 $ 0 0.00% $ 0
