10 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, which follows: Sales s 1.600.000 Variable expenses 569,100 Contribution margin Fixed expenses 1,134,000 Net operating income (loss) S (103,100) In an effort to isolate the problem, the president has asked for an income statement segmented by division. Accordingly, the Accounting Department has developed the following information: Division East Central West Sales $ 380,000 $ 630,000 $ 590,000 Variable expenses as a percentage of sales 49 % 28 % 35 % Traceable fixed expenses $ 267,000 $ 335,000 $ 210,000 Required: 1. Prepare a contribution format income statement segmented by divisions, as desired by the president. Division Central Total Company East West 2-a. As a result of a marketing study, the president believes that sales in the West Division could be increased by 10% if monthly advertising in that division were increased by $20,000. Calculate the incremental net operating income. Incremental net operating income 2-b. Would you recommend the increased advertising? O No