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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	$	1,547,000
Variable expenses		567,780
Contribution margin		979,220
Fixed expenses		1,077,000
Net operating loss	$	(97,780)

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	$	407,000		$	600,000		$	540,000
Variable expenses as a percentage of sales		54	%		22	%		40	%
Traceable fixed expenses	$	295,000		$	324,000		$	203,000

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
(Click to select)Variable expensesGeographic market segment marginCommon fixed expenses not traceable to geographic marketsSalesTraceable fixed expensesNet operating income (loss)Contribution margin	$	$	$	$
(Click to select)Variable expensesSalesGeographic market segment marginTraceable fixed expensesCommon fixed expenses not traceable to geographic marketsNet operating income (loss)Contribution margin
(Click to select)Contribution marginSalesGeographic market segment marginVariable expensesNet operating income (loss)Common fixed expenses not traceable to geographic marketsTraceable fixed expenses
(Click to select)SalesNet operating income (loss)Geographic market segment marginVariable expensesCommon fixed expenses not traceable to geographic marketsContribution marginTraceable fixed expenses
(Click to select)Common fixed expenses not traceable to geographic marketsContribution marginVariable expensesTraceable fixed expensesSalesNet operating income (loss)Geographic market segment margin		$	$	$
(Click to select)SalesTraceable fixed expensesNet operating income (loss)Common fixed expenses not traceable to geographic marketsGeographic market segment marginContribution marginVariable expenses
(Click to select)Common fixed expenses not traceable to geographic marketsGeographic market segment marginNet operating income (loss)SalesVariable expensesContribution marginTraceable fixed expenses	$

2-a.	The companys sales manager believes that sales in the Central geographic market could be increased by 19% if monthly advertising were increased by $26,000. Calculate the incremental net operating income. (Omit the "$" sign in your response.)

Incremental net operating income

$

2-b.	Would you recommend the increased advertising?
	No Yes

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