Need help with computations and solutions.

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3. USING A RESPONSIBILITY INCOME STATEMENT Shown below is the current monthly income statement of Metro Video, by profit centers: Segments METRO VIDEO Income Statement by Profit Centers For the Month Ended April 30, 20 Metro Video Equipment Sales Video Rentals % Dollars $560,000 (268.800) $291,200 (67.200) % 100 (48) 52 (12) Dollars $280,000 (198,800) $81,200 (25 200) 100 (71) 29 (09) Dollars $280,000 (70.000) $210,000 (42.000) % 100 (36) 75 (15) Sales Variable Costs Contribution margin Fixed costs traceable to departments Departments responsibility margins Common fixed costs Income from operations $224,000 40 $56,000 20 $168.000 60 (61.600) $162.400 (11) 29 On the basis of this information, compute the increase in monthly income from operations that may be expected to result from each of the following actions a Spending $5.000 per month in advertising is expected to increase sales in the Equipment Sales Department by 35% S b. Closing the Equipment Sales Department and allowing the Video Rentals Department to On the basis of this information, compute the increase in monthly income from operations that may be expected to result from each of the following actions: a. Spending $5,000 per month in advertising is expected to increase sales in the Equipment Sales Department by 35%. $ b. Closing the Equipment Sales Department and allowing the Video Rentals Department to expand is expected to increase the revenue of the Video Rentals Department by $105,000 per month. This action also is expected to increase fixed costs traceable to the Video Rentals Department by $40,000 per month. $_