Bembry 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	$	1,560,000
Variable expenses		633,400
Contribution margin		926,600
Fixed expenses		1,019,000
Net operating income (loss)	$	(92,400)

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	$	380,000		$	640,000		$	540,000
Variable expenses as a percentage of sales		57	%		28	%		44	%
Traceable fixed expenses	$	297,000		$	332,000		$	209,000
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 $21,000 based on the belief that it would increase that division's sales by 17%. 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?