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Hello,

I need help with the following question:

The company's sales manager believes that sales in the Central geographic market could be increased by 15% if monthly advertising were increased by $25,000. Would you recommend the increased advertising? Show computationsto support your answer.

Data is attached.
Exercise 6-11.xls

Exercise 6-11 Segmented Income Statement
Bovine Company, a wholesale distributor of DVDs, has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement below:
Sales
Variable Expenses
Contribution Margin
Fixed Expenses
Net operating loss

$1,500,000
588,000
912,000
945,000
($33,000)

In an effort to isolate the problem, the president has asked for an income statement segmented by geographic market. Accordingly, the Accounting Department has developed the following data:

Sales
Variable expenses as a percentage of sales
Traceable fixed espenses

Geographic Market
South
Central
North
$400,000
$600,000 $500,000
52%
$240,000

30%
40%
$330,000 $200,000

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Dear Student, Please find... View the full answer

Accounting-8333909.xls

Income Statement segmented by Geographic Market
Particulars

South

Central

Sales
400,000
600,000
Less Variable Expense
208,000
180,000
Contribution
192,000
420,000
Less Traceable Fixed Expenses...

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