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Bovine Company a wholesale distributor of DVDs




Bovine Company a wholesale distributor of DVDs;Bovine Company, a wholesale distributor of DVDs, has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement below;Sales $ 1,500,000;Variable expenses 588,000;Contribution margin 912,000;Fixed expenses 945,000;Net operating loss $ (33,000);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 data;Geographic Market;South Central North;Sales $ 400,000 $ 600,000 $ 500,000;Variable expenses as a percentage of sales 52 % 30 % 40 %;Traceable fixed expenses $ 240,000 $ 330,000 $ 200,000;Required;1.;Prepare a contribution format income statement segmented by geographic market, as desired by the president. (Input all amounts as positive values except losses which should be indicated by a minus sign. Omit the "$" sign in your response.);Geographic Market;Total;Company South Central North;$ $ $ $;$ $ $;$;2a.;The company%u2019s sales manager believes that sales in the Central geographic market could be increased by 15% if monthly advertising were increased by $25,000. Calculate the incremental net operating income. (Omit the "$" sign in your response.);Incremental net operating income $;2b. Would you recommend the increased advertising?;Yes;No


Paper#29441 | Written in 18-Jul-2015

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