Exercise 6-11 (Algo) Segmented Income Statement [L06-4) 905,170 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: Sales $ 1,583,000 Variable expenses 677,030 Contribution margin Fixed expenses 995,000 Het operating Income (10) $ 190,830) 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: sest East $363,000 Division Central 5680,000 298 $ 31,000 5 540,000 44 $ 193,000 Sales Variable expenses a percentage of water Traceable fixed expenses $ 273,000 Required: 1. Prepare a contribution format income statement segmented by divisions. 2-3. 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 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? Complete this question by entering your answers in the tabs below. Regt Red 2A Res 20 Prepare a contribution format income statement segmented by divisions Division Central East West Total Company Sales Variable expenses as a percentage of sales Traceable fixed expenses $363,000 610 $ 273,000 $ 680,000 290 $ 331,000 $ 540,000 484 $ 193,000 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 $28.000 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? 2-6. Would you recommend the increased advertising? sook Complete this question by entering your answers in the tabs below. $ Hint Reg 1 Red 2A Reg 25 M Prepare a contribution format income statement segmented by divisions. Division Central Print West East Total Company o Iseferences 0 0 0 os D 05 D 5 0 A> mework 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: East 5 363,000 618 $ 273,000 Division Central $ 680,000 298 $ 331,000 Nest $ 540,000 480 $ 193,000 Sales Variable expenses as a percentage of sales Traceable fixed expenses 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 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? 2-6. Would you recommend the increased advertising? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 20 3 noos 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 12%. 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.) by Net operating income will Contribution margin Fixed expenses Net operating income (lons) 905,170 996.000 $ 190,830) 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 males Traceable fixed expenses East $363.000 611 $ 223,000 Division Central $ 680,000 291 $ 231,000 Ment 5 540,000 480 $ 193,000 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 $28.000 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? Complete this question by entering your answers in the tabs below. Reg 1 ReG ZA Rec 20 Would you recommend the increased advertising? Yos No
