Ch 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: 5 points Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) $ 1,577,000 617,530 959,470 1,055, 000 (95,530) eBook Hint 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 $ 377,000 59% $ 252,000 Division Central $ 670,000 218 $329,000 West $530,000 48% $191,000 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 $26,000 based on the belief that it would increase that division's sales by 19%. 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? 4 2-b. Would you recommend the increased advertising? Complete this question by entering your answers in the tabs below. 5 points Reg 1 Reg 2A Req 2B eBook Prepare a contribution format income statement segmented by divisions. Hint Division Central Total Company East West 0 0 0 0 0 $ 0 $ 0 $ 0 $ 0 Che 4 income increase (decrease) if the proposal is implemented? 2-b. Would you recommend the increased advertising? 5 points Complete this question by entering your answers in the tabs below. eBook Reg 1 Reg 2A Req 2B Hint 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 19%. 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 "yumcu 4 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 $26,000 based on the belief that it would increase that division's sales by 19%. Assuming these estimates are accurate, how much would the company's net operating income increase (decrease) if the proposal is implemented? 5 points 2-b. Would you recommend the increased advertising? eBook Complete this question by entering your answers in the tabs below. Hint Req 1 Req 2A Req 2B Would you recommend the increased advertising? Yes No
