Shown as follows are responsibility income statements for Butterfield, Inc., for the month of March. Investment Centers Sales Variable costs 225,000 50 Contribution margin $225,000 Fixed costs traceable to divisions 135,000 30 Butterfield, Inc Division 1 Dollars Dollars N $450,000 100% $ 300,000 180,000 50% $120,000 63,000 Division 2 Dollars 100% $150,000 60 40% $ 105,000. 100% 45,000 30 70% 21 72,000 48 Division responsibility margin $ 90,000 Common fixed costs Income from operations $ 45,000 20% $ 57,000 45,000 10 10 19% $ 33,000 22% 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 Dollars $300,000 180,000 $120,000 42,000 $ 78,000 21,000 $57,000 Dollars 100% $100,000 60 52,000 40% $48,000 14 26,000 26% $22,000 7 19% Product B Dollars 100% $ 200,000 52 128,000 48% $ 72,000 26 16,000 22% $ 56,000 N 100% 64 36% 18 28% Required: a. The company plans to initiate an advertising campaign for one of the two products in Division 1. The campaign would cost $10,000 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 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 $200,000. Complete this question by entering your answers in the tabs below. 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 $10,000 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 B is advertised. Product A Product B Expected Change In Responsibility Margin Required E > Prepare an income statement for Butterfield, Inc., by division, under the assumption that in April the monthly sales in Division 2 increase to $200,000. BUTTERFIELD, INC. Responsibility Income Statement For April Butterfield, Inc. Dollars Division 1 Division 2 Percent Dollars Percent Dollars Percent % % % % % % % % % %