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Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement: Sales gt 1,525,999 Vaniable expenses 514,666 Contribution margin 1,616,466 Fixed expenses 1,111,660 Net operating income (loss) $ (166J666) In an effort to resolve the problem, the company would like to prepare an income statement segmented by division. Accordingly, the Accounting Department has developed the following information: Division East Central West Sales $ 365,999 $ 646,666 55' 529,999 Vaniable expenses as a percentage of sales 66% 21% 31% Thaceable fixed expenses $ 252,666 $ 327,666 $ 263,666 Required: 1. Prepare a contribution format income statement segmented by divisions. 2a. The Marketing Department has proposed increasing the West Division's monthly advertising by $26,000 based on the belief that it would increase that division's sales by 15%, Assuming these estimates are accurate, how much would the company's net operating income increase (decrease) ifthe proposal is implemented? 2b. Would you recommend the increased advertising? Req 1 Req 2A Req 2B Prepare a contribution format income statement segmented by divisions. Division Total East Central West Company Sales $ 1,525,000 $ 365,000 V $ 640,000 $ 520,000 V Variable expenses 514,600 V 219,000 134,400 161,200 V Contribution margin V 1,010,400 146,000 505,600 358,800 (782,000) V (252,000) (327,000) 203,000 V S Gross loss X 228,400 (106,000) $ 178,600 $ 155,800 Traceable fixed expenses X 329,000 V Net operating income X $ (100,600)Ida Company produces a handcrafted musical instrument called a gamelan that is similar to a xylophone. The gamelans are sold for $880. Selected data for the company's operations last year follow: Units in beginning inventory 9 Units produced 239 Units sold 249 Units in ending inventory 49 Variable costs per unit: Direct materials $ 115 Direct labor $ 335 Variable manufacturing overhead $ 35 Variable selling and administrative $ 25 Fixed costs: Fixed manufacturing overhead 3- 63,689 Fixed selling and administrative in 23,689 The absorption costing income statement prepared by the company's accountant for last year appears below: Sales $ 211,189 Cost Oi: goods sold 176,489 Gross margin 46,869 Selling and administrative expense 29,669 Net operating income $ 11,889 Required: 1. Under absorption costing, how much fixed manufacturing overhead cost is included in the company's inventory at the end of last year? 2. Prepare an income statement for last year using variable costing. Sales Variable cost of goods sold a 98 211,288 6 (118,488) 0 Contribution margin (94,800) Variable selling and administrative expense (8.888) 9 88,888 9 0 Variable expenses: 6 6 o Fixed selling and administrative expense (23.888) 0 (3,288) Fixed manufacturing overhead 0 $ (Gamma Net operating income 0 $ (98,000) Piedmont Fasteners Corporation makes three different clothing fasteners in its manufacturing facility in North Carolina. All three products are sold in highly competitive markets, so the company is unable to raise prices without losing an unacceptable number of customers. Data from the most recent period concerning these products appear below: Velcro Metal Nylon Annual sales volume 102, 800 205, 600 411, 200 Unit selling price $ 1.65 $ 1.50 $ 0.85 Variable expense per unit $ 1.25 $ 0.70 $ 0. 25 Contribution margin per unit $ 0. 40 $ 0.80 $ 0.60 Total fixed expenses are $411,200 per period. Of the total fixed expenses, $20,000 could be avoided if the Velcro product is dropped, $80,000 if the Metal product is dropped, and $60,000 if the Nylon product is dropped. The remaining fixed expenses of $251,200 consist of common fixed expenses such as administrative salaries and rent on the factory building that could be avoided only by going out of business entirely. The company's managers would like to compute the break-even point in dollar sales for the company as a whole, and the break-even point in unit sales for each product. They are considering two methods for computing each product's break-even point unit sales: Method #1: Include each product's traceable fixed costs and an allocated share of the common fixed costs in the numerator of each break-even calculation. The common fixed costs would be allocated to the three products using sales dollars as the allocation base. Method #2: Only include each product's traceable fixed costs in the numerator of each break-even calculation. Required: 1. Using data from the most recent period, prepare a contribution format segmented income statement. 2. What is the company's overall break-even point in dollar sales? 3a. Calculate the break-even point in unit sales for each product using method 1. 4C If the tly the breakComplete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3a and 3b Req 4a and 4b Req 5 Using data from the most recent period, prepare a contribution format segmented income statement. Piedmont Fasteners Corporation Contribution Format Income Statement Velcro Metal Nylon Total Sales 169,620 S 308,400 349,520 $ 827,540 Variable expenses 128,500 143,920 102,800 375,220 Contribution margin 41,120 164,480 246,720 452,320 Traceable fixed expenses 20,000 80,000 60,000 160,000 S 21,120 S 84,480 $ 186,720 292,320 Common fixed expenses 251,200 Net operating income 41, 120