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This is a 3 part question. I know the answers but don't know how to solve it. Please show all work. 13. Maroni & Sons
This is a 3 part question. I know the answers but don't know how to solve it. Please show all work.
13. Maroni & Sons is a plumbing and heating company. A contribution margin format segmented income statement by division) for the most recent year is given below Division Plumbing Heating Total Company $506.000 100% S624.000 100% $1.130.000 100% Sales Variable expenses $328,900 65% $149,760 24% $478,660 42% Contribution margin. 177,100 35% $474,240 76% $651,340 58% Traceable fixed expenses $91.080 18% LS262,080 42% LS353,160 31% Segment margin $86,020 17% $212,160 34% $298,180 26% Common fixed expenses 000 Net operating income $210.180 19% To increase sales in the Plumbing division next year, Maroni & Sons is considering starting an intense advertising campaign in that division. This campaign would cost $15,000 and would be expected to increase sales in the Plumbing division by $120,000. If the company were to adopt the advertising campaign, what would be the impact on the total company's profit? a. Profit would increase by $105,000 b. Profit would decrease by $105,000 c. Profit would increase by $27,000 cis the right answer. d. Profit would decrease by $27,000
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