Question: Trans Sport Company sells sporting goods to retailers in three

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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  • CreatedJune 27, 2014
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