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Shown as follows are responsibility income statements for Butterfield, Inc., for the month of March. Butterfield, Inc Dollars Sales Variable costs $ 470,000 243,000
Shown as follows are responsibility income statements for Butterfield, Inc., for the month of March. Butterfield, Inc Dollars Sales Variable costs $ 470,000 243,000 Contribution margin. Fixed costs traceable to divisions $ 227,000 133,800 Division responsibility margin Common fixed costs Income from operations $ 93,200 40,000 $ 53,200 Investment Centers Division 1 Dollars % 100.00% $340,000 51.70 204,000 48.30% $136,000 28.47 71,400 19.83% $ 64,600 39,000 40% $ 91,000 Division 2 % Dollars 100% $ 130,000 60 % 100% 30 70% 21 62,400 48 19% $ 28,600 22% 8.51 11.32% Profit Centers Division 1 Product Al Product B Sales Variable costs Contribution margin. Fixed costs traceable to products Product responsibility margin Common fixed costs Dollars $ 3407000 204,000 $ 136,000 47,600 % Dollars 100% $ 136,000 % Dollars 100.00% $204,000 % 100.00% Responsibility margin for division $ 88,400 23,800 $ 64,600 60 61,200 40% $ 74,800 14 14,280 26% $ 60,520 7 19% 45.00 55.00% $ 61,200 10.50 33,320 44.50% $ 27,880 142,800 70.00 30.00% 16.33 13.67% Required: a. The company plans to initiate an advertising campaign for one of the two products in Division 1. The campaign would cost $2,0 per month and is expected to increase the sales of whichever product is advertised by $40,000 per month. Compute the expecte 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
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