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Exercise 6-11 Segmented Income Statement Bovine Company, a wholesale distributor of DVDs, has been experiencing losses for some time, as shown by its...

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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.

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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 $1,500,000 Variable Expenses 588,000 Contribution Margin 912,000 Fixed Expenses 945,000 Net operating loss ($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: Geographic Market South Central North Sales $400,000 $600,000 $500,000 Variable expenses as a percentage of sales 52% 30% 40% Traceable fixed espenses $240,000 $330,000 $200,000
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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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