Trans Sport Company sells sporting goods to retailers in three different states€”Florida, Georgia, and Tennessee. The following profit analysis by state was prepared by the company:

In addition, assume that inventories have been negligible. Management believes it could increase state sales by 20%, without increasing any of the fixed costs, by spending an additional $ 42,200 per state on advertising.
1. Prepare a contribution margin by state report for Trans Sport Company.
2. Determine how much state operating profit will be generated for an additional $ 42,200 per state on advertising.
3. Which state will provide the greatest profit return for a $ 42,200 increase in advertising?Why?

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Georgia $1,000,000 535,000 465,000 337 500 S127,500 Florida Tennessee Revenue Cost of goods sold Gross profit Selling expenses Income from operations 1,125000 562,500 562,500 365,600 S 196,900 $1,181,250 562,500 618,750 420,000 198,750 The following fixed costs have also been provided: Florida 1 12,500 84,37S Georgia $225,000 135,000 Tennessee Fixed manufacturing costs Fixed selling expense 126,500 113,625