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5 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 BO Det Solos Variable expenses Contribution margin Fixed expenses Wet operating Income (loss + 1.609,000 65,250 949,750 1,045,000 $ 195,250) 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 ERE Sales Central West 5409,000 Variable expense percentage of water 3660,000 $540,000 Treeable fixed expenses 361 445 $209,000 $333,000 $209,000 459 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 $28,000 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? 2-6. Would you recommend the increased advertising? Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Prepare a contribution format Income statement segmented by divisions. Division Total Company East Central West Sales Variable expenses Contribution margin Traceable fixed expenses Gross margin 0 0 0 0 0 $ 0$ 0 $ 0 Common fixed expenses not traceable to divisions Net operating income $ KB Req 2A > Reg 1 Reg 2A Reg 28 The Marketing Department has proposed increasing the West Division's monthly advertising by $28,000 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 Reg 1 Reg 2A Req 2B Would you recommend the increased advertising? Yes No