Complete Req 1

Sales Variable expenses Contribution margin Fixed expenses Net operating income (105) $ 1,515,000 609,100 905,900 996,000 $ (90,100) 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 Central West Sales $385,000 $610,000 $520,000 Variable expenses as a percentage of sales 271 Traceable fixed expenses $297,000 $329,000 $207,000 560 441 Required: 1. Prepare a contribution format income statement segmented by divisions. 2-0. The Marketing Department has proposed increasing the West Division's monthly advertising by $22,000 based on the belief that it would increase that division's sales by 12%. 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? Sales Variable expenses as a percentage of sales Traceable fixed expenses East $385,000 568 $297,000 Division Central $610,000 278 $329,000 West $520,000 444 $207,000 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 $22,000 based on the belief that it would increase that division's sales by 12%. 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? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Reg 1 Req 2A Reg 28 Prepare a contribution format income statement segmented by divisions. Sales Variable expenses Contribution margin Traceable fixed expenses Divisional segment margin Common fixed expenses not traceable to divisions Net operating loss Division Total Company East Central West $ 1,000,000 $ 250,000 $400,000 $ 350,000 390,000 130,000 120,000 140,000 610,000 120,000 280,000 210,000 535,000 160,000 $ 200,000 175,000 75,000 $(40,000) $ 80,000 $ 35,000 90,000 $ (15,000)