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The Summer Products Division of Maritime Sports Corporation produces and markets two products for use in the water: Tubes and Skis. The following data were
The Summer Products Division of Maritime Sports Corporation produces and markets two products for use in the water: Tubes and Skis. The following data were gathered on activities last month: Tubes Skis Sales in units Selling price per unit Variable production costs Traceable fixed production costs Variable selling expenses per unit Traceable fixed selling expenses Allocated division administrative expenses 8,000 $24 $6 $38,000 $2 $4,000 $65,000 3,000 $40 $20 $10,000 $3 $1,500 $34,000 a. Prepare a segmented Income statement in the contribution format for last month, as a whole and for each product. Use the following format: Summer Products $ Tubes Skis description $ $ b. The Summer Products division manager believes that sales of tubes could be increased by 12% If monthly advertising Increased by $14,500. Would you recommend the Increased advertising? Why or why not? c. Independent of Part a), assume Summer Products Division of Maritime Sports had an operating Income of $45,000 and an average operating asset pool of $225,000. What was the ROI for that division? Show your calculations
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