Using a Responsibility Income Statement

question 72

Essay

Using a responsibility income statement
Shown below is the current monthly income statement of Metro Video,by profit centers:
METRO VIDEO
Income Statement by Profit Centers
For the Month Ended April 30,20__
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 $40,000 per month.$________

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Definitions:

Inclusive Fitness

A concept in evolutionary biology that refers to an individual's genetic success as measured not only by its own offspring but also by the offspring of its relatives, considering the shared genetic heritage.

Altruism

The principle or practice of concern for the welfare of others, often at the expense of one's self-interest.

Reproductive Success

The extent to which an organism passes its genes to the next generation, often measured by the number of offspring that survive to reproduce.

Lever

A rigid bar resting on a pivot, used to help move a heavy or firmly fixed load with one end when pressure is applied to the other.