ZAPPY currently sells distinct products in each of its market segments. The firm's marketing manager has proposed that this strategy be abandoned. She proposes that the firm's products in the Americas be extended as global brands to all existing and future market areas. She believes that this approach will enhance the global perception of the ZAPPY name and reduce the cost of future market entry projects. She estimates that this strategy will reduce variable production and marketing costs from 60 percent to 58 percent of sales across the firm. However, she also projects that European and Asian sales will decrease by 5 percent from projected levels in the next fiscal year because some consumers will not accept the global brands. Which of the following is ZAPPY's projected total sales and contribution margin in the next fiscal year? Sales (A) $247,000 (B) $252,000 (C) $264,010 (D) $269,100 Contribution Margin $103,740 $105,840 $110,922 $113,022 ZAPPY is a manufacturer of hand-held game cartridges. It divides its market into three main market segments: the Americas, Europe, and Asia. Financial information for this fiscal year is presented below. Americas Europe Asia Sales Variable costs Contribution margin Direct fixed costs Direct profit Allocated home office cost $100,000 $70,000 60,000 42,000 $90,000 54,000 $40,000 $28,000 $36,000 5,000 4,000 3,000 $35,000 $24,000 $33,000 10,000 7,000 9,000 Segment profit $25,000 $17,000 $24,000 Note that the direct fixed costs refer to entry costs particular to each market, and these could be eliminated if ZAPPY exits a market. In addition, the home-office costs have been allocated to the market segments on the basis of division revenue. Next year, ZAPPY expects sales to be flat in the Americas and in Europe but expects 20 percent growth in Asia.