Question: could you please help me with these accounting problems Bovine Company, a wholesale distributor of umbrellas. has been experiencing losses for some time, as shown
could you please help me with these accounting problems


Bovine Company, a wholesale distributor of umbrellas. has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement: Sales $2,200,000 Variable expenses 872,500 Contribution margin 1,327,500 Fixed expenses 1,345,000 Operating loss $ (17,500) 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: Geographic Market South Central North Sales $620,000 $819,000 $761,000 Variable expenses as a percentage of sales 52% 30% 40% Traceable fixed expenses $360,000 $529,000 $320,000 Required: 1. Prepare a contribution format income statement segmented by geographic market, as requested by the president. 2-a. The company's sales manager believes that sales in the Central geographic market could be increased by 15% if monthly advertising is increased by $45,000. Calculate the incremental net operating income. 2-b. Would you recommend the increased advertising? 0 Yes 0 No
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