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Shown as follows are responsibility income statements for Buttereld, Inc_, for the month of March. Investment Centers Butterfield, Inc Division 1 Division 2 Dollars %

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Shown as follows are responsibility income statements for Buttereld, Inc_, for the month of March. Investment Centers Butterfield, Inc Division 1 Division 2 Dollars % Dollars % Dollars % Sales :3 428,666 166.66% $ 228,888 166% $ 158,888 166% Variable costs 282,666 49.29 162,888 66 45,888 36 Contribution margin :3 213,666 56.21% $ 188,888 46% $ 185,888 26% Fixed costs traceable to divisions 128,266 36.64 56,288 21 22,888 48 Division responsibility margin :5 84,366 26.62% $ 51,369 19% $ 33,669 22% Common fixed costs 58,666 11.96 Income from operations :3 34,366 8.12% Profit Centers Division 1 Product A Product B Dollars % Dollars % Dollars % Sales 3. 228,666 166% $ 188,866 166.66% $ 162,888 166.66% Variable costs 162,666 66 48,666 45.66 113 ,488 26.66 Contribution margin 3; 183,666 46% $ 59,466 55.66% $ 43,688 36.66% Fixed costs traceable to products 32,866 14 11,346 16.56 26,468 16.33 Product responsibility margin 3: 26,266 26% $ 48,866 44.56% $ 22,148 13.62% Common fixed costs 18,966 2 Responsibility margin for division 5 51,366 19% Required: at. The company plans to initiate an advertising campaign for one ofthe two products in Division 1. The campaign would cost $3,000 per month and is expected to increase the sales of whichever product is advertised by $30,000 per month. Compute the expected increase in the responsibility margin of Division 1 assuming that (1] product A is advertised and [2] product Bis advertised. e. Prepare an income statement for Buttereld, Inc_, by division, under the assumption that in April the monthly sales in Division 2 increase to $170,000

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