Shown as follows are responsibility income statements for Butterfield, Inc., for the month of March. 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 Dollars Dollars $ 410,000 100.00% $ 260,000 100% 201,000 49.02 156,000 60 50.98% $ 104,000 40% 126,600 30.88 54,600 21 $ 82,400 20.10% $ 49,400 19% 40,000 9.76 $ 42,400 10.34 Division 2 Dollars $ 150,000 100% 45,000 30 $ 105,000 70% 72,000 48 $ 33,000 223 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 Product B Dollars Dollars % Dollars $ 260,000 100% $ 104,000 100.00% $ 156,000 100.00% 156,000 60 46,800 45.00 109,200 70.00 $ 104,000 40% $ 57,200 55.00% $ 46,800 30.00% 36,400 14 10,920 10.50 25,480 16.33 $ 67,600 26% $ 46,280 44.50% $ 21,320 13.67% 18,200 $ 49,400 198 Required: a. The company plans to initiate an advertising campaign for one of the two products in Division 1. The campaign would cost $5,000 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 $170,000. Prepare an income statement for Butterfield, Inc., by division, under the assumption that in April the monthly sales in Division 2 increase to $170,000. (Round your percentage answers to 2 decimal place (i.e. 0.1234 should be considered as 12.34%).) BUTTERFIELD, INC. Responsibility Income Statement For April Butterfield, Inc. Division 1 Dollars Percent Dollars Percent Division 2 Dollars Percent $ 0 .00 % $ 0 0.00% 0 0.00% Sales Variable costs Contribution margin Fixed costs traceable to divisions D Division responsibility margin Common costs Division responsibility margin 0 D $ 0 0.00% $ 0 0.00 % $ 0 0.00% $ 0 0.00% Expected Change in Responsibility Margin Product A Product B