B Exercise 6-11 (Algo) Segmented Income Statement (L06-4) 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: ok ut Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) $ 1,595,000 581,100 1,013,900 1,115,000 $ (101,100) ht inces 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: Sales Variable expenses as a percentage of sales Traceable fixed expenses East $405,000 46% $272,000 Division Central $630,000 20% $335,000 West $560,000 488 $199,000 Required: 1. Prepare a contribution format income statement segmented by divisions. 2-a. The Marketing Department has proposed increasing the West Division's monthly advertising by $25,000 based on the belief that it would increase that division's sales by 11%. Assuming these estimates are accurate, how much would the company's net operating income increase (decrease) if the proposal is implemented? 2-b. Would you recommend the increased advertising? Required: 1. Prepare a contribution format income statement segmented by divisions. 2-a. The Marketing Department has proposed increasing the West Division's monthly advertising by $25,000 based on the belief that it would increase that division's sales by 11%. Assuming these estimates are accurate, how much would the company's net operating income increase (decrease) if the proposal is implemented? 2-b. Would you recommend the increased advertising? ok ht Complete this question by entering your answers in the tabs below. int ences Req 1 Reg 2A Reg 2B Prepare a contribution format income statement segmented by divisions. Division Total Company East Central West 0 0 0 0 0 $ 0 $ 0 $ 0 S 0 Reg Req 2A > Required: 1. Prepare a contribution format income statement segmented by divisions. 2-a. The Marketing Department has proposed increasing the West Division's monthly advertising by $25,000 based on the belief that it would increase that division's sales by 11%. Assuming these estimates are accurate, how much would the company's net operating income increase (decrease) if the proposal is implemented? 2-b. Would you recommend the increased advertising? ok Complete this question by entering your answers in the tabs below. t nces Reg 1 Req 2A Reg 2B The Marketing Department has proposed increasing the West Division's monthly advertising by $25,000 based on the belief that it would increase that division's sales by 11%. Assuming these estimates are accurate, how much would the company's net operating income increase (decrease) if the proposal is implemented? (Do not round intermediate calculations.) Net operating income will by B Sales Variable expenses as a percentage of sales Traceable fixed expenses $ 405,000 46% $ 272,000 $630,000 209 $335,000 $560,000 48% $199,000 Required: 1. Prepare a contribution format income statement segmented by divisions. 2-a. The Marketing Department has proposed increasing the West Division's monthly advertising by $25,000 based on the belief that it would increase that division's sales by 11%. Assuming these estimates are accurate, how much would the company's net operating income increase (decrease) if the proposal is implemented? 2-b. Would you recommend the increased advertising? ook nt Int Complete this question by entering your answers in the tabs below. ences Req 1 Reg 2A Req 2B Would you recommend the increased advertising? Yes O No
