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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 Variable expenses Contribution margin Fixed expenses Operating loss $2,160,000 874,900 1,285,100 1,337,000 $ (51,900) 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: Sales Variable expenses as a percentage of sales Traceable fixed expenses Geographic Market South Central North $616,000 $815,000 $729,000 $336,000 $546,000 55% Total 30% 40% $316,000 Required: 1. Prepare a contribution format income statement segmented by geographic market, as requested by the president. Geographic Market

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 Variable expenses Contribution margin Fixed expenses Operating loss $2,160,000 874,900 1,285,100 1,337,000 $ (51,900) 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: Sales Variable expenses as a percentage of sales Traceable fixed expenses Geographic Market South Central North $616,000 $815,000 $729,000 $336,000 $546,000 55% Total 30% 40% $316,000 Required: 1. Prepare a contribution format income statement segmented by geographic market, as requested by the president. Geographic Market

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 Variable expenses Contribution margin Fixed expenses Operating loss $2,160,000 874,900 1,285,100 1,337,000 $ (51,900) 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: Sales. Variable expenses as a percentage of sales. Traceable fixed expenses Geographic Market South Central North $616,000 $815,000 $729,000 $336,000 $546,000 55% Total Company $ 30% Required: 1. Prepare a contribution format income statement segmented by geographic market, as requested by the president. 0 South 40% $316,000 Geographic Market 0 Central 0 North 0
Transcribed Image Text: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 Variable expenses Contribution margin Fixed expenses Operating loss $2,160,000 874,900 1,285,100 1,337,000 $ (51,900) 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: Sales. Variable expenses as a percentage of sales. Traceable fixed expenses Geographic Market South Central North $616,000 $815,000 $729,000 $336,000 $546,000 55% Total Company $ 30% Required: 1. Prepare a contribution format income statement segmented by geographic market, as requested by the president. 0 South 40% $316,000 Geographic Market 0 Central 0 North 0
Required: 1. Prepare a contribution format income statement segmented by geographic market, as requested by the president. 4 Total Company Incremental net operating income $ $ $ 0 0 0 $ South Geographic Market 0 0 $ Central 0 0 S North 0 0 2-a. The company's sales manager believes that sales in the Central geographic market could be increased by 10% if monthly advertising is increased by $41,000. Calculate the incremental net operating income.
Transcribed Image Text:Required: 1. Prepare a contribution format income statement segmented by geographic market, as requested by the president. 4 Total Company Incremental net operating income $ $ $ 0 0 0 $ South Geographic Market 0 0 $ Central 0 0 S North 0 0 2-a. The company's sales manager believes that sales in the Central geographic market could be increased by 10% if monthly advertising is increased by $41,000. Calculate the incremental net operating income.
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