EXERCISE 1215 Segmented Income Statement [LO1] Wingate Company, a wholesale distributor of videotapes, has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement, which follows: Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,000,000 Variable expenses . . . . . . . . . . . . . . . . . . . . . . $390,000 Contribution margin . . . . . . . . . . . . . . . . . . . . . $610,000 Fixed expenses . . . . . . . . . . . . . . . . . . . . . . . . . $625,000 Net operating income (loss) . $(15,000) In an effort to isolate the problem, the president has asked for an income statement segmented by division. Accordingly, the Accounting Department has developed the following information: Division East Central West Sales $250,000 $400,000 $350,000 Variable expenses as a percentage of sales 52% 30% 40% Traceable fixed expenses $180,000 $200,000 $175,000 Required: 1. Prepare a contribution format income statement segmented by divisions, as desired by the president. 2. As a result of a marketing study, the president believes that sales in the West Division could be increased by 20% if monthly advertising in that division were increased by $15,000. Would you recommend the increased advertising? Show computations to support your answer. " - Sent to Accounting Expert Tutor on 1/29/2011 at 2:25pm "This was the start of the segment income statement" Division East Central West $ 250,000 $ 400,000 $ 350,000 130,000 120,000 140,000 120,000 280,000 210,000 $ 160,000 $ 200,000 $ 175,000 -40,000 80,000 35,000