Ch. 6: Homework Saved 1 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 (toss) $ 1,558,000 656,620 901,380 992.09 $ (90,620) 100 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 Centra West Sales $400,000 $630,000 $520,000 Variable expenses as a percentage of sales 494 37 431 Traceable fixed expenses $287,000 $329,000 $200,000 Print References 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 $30,000 based on the belief that it would increase that division's sales by 14%. 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? Req 1 Req 2A Req 2B Prepare a contribution format income statement segmented by divisions. Division Total Company East Central West 0 0 0 0 0 $ 0 $ 0 $ 0 Reu1 Req 2A Req 1 Reg 2A Reg 28 The Marketing Department has proposed increasing the West Division's monthly advertising by $30,000 based on the belief that it would increase that division's sales by 14%. 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 Reg 1 Reg 2A Req 2B Would you recommend the increased advertising? Oros ONO