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: Sales Variable expenses Contribution margin Fixed expenses Net operating income (2006) $ 1,638,000 572,800 1,065,200 1,172,000 5 (106,000) 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 sales Traceable fixed expenses Kost $398,000 SON $286,000 Division Contral $660,000 25 $329,oo West 5580,000 361 $199,000 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? 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 Req 2A Reg 28 Prepare a contribution format Income statement segmented by divisions. Division Total Company East Central West 0 0 0 0 os 05 0 $ 0 $ 0 Req 2A >