Accounting Department has developed the following information: Sales Variable expenses as a percentage of sales Traceable...

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Accounting Department has developed the following information: Sales Variable expenses as a percentage of sales Traceable fixed expenses East $ 250,000 52% $ 160,000 Division Central $ 400,000 30% $ 200,000 West $ 350,000 40% $ 175,000 Required: 1. Prepare a contribution format income statement segmented by divisions. 2-a. The Marketing Department has proposed increasing the West Division's monthly advertising by $15,000 based on the belief that it would increase that division's sales by 20%. Assuming these estimates are accurate, how much would the company's net operating income increase (decrease) if the proposal is implemented? 2-b. Would you recommend the increased advertising? Accounting Department has developed the following information: Sales Variable expenses as a percentage of sales Traceable fixed expenses East $ 250,000 52% $ 160,000 Division Central $ 400,000 30% $ 200,000 West $ 350,000 40% $ 175,000 Required: 1. Prepare a contribution format income statement segmented by divisions. 2-a. The Marketing Department has proposed increasing the West Division's monthly advertising by $15,000 based on the belief that it would increase that division's sales by 20%. Assuming these estimates are accurate, how much would the company's net operating income increase (decrease) if the proposal is implemented? 2-b. Would you recommend the increased advertising?

Answer rating: 100% (QA)

1 2a The marketing department has proposed increasing the West divisions monthly advertising by 15000 with the belief that it would increase that divi... View the full answer