Exercise 6-11 (Algo) Segmented Income Statement [LO6-4) 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 Yixed expenses Het operating income foon 1,550,000 395,000 9647200 1,061,000 (36,000) 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 DAVE Sales Variable expenses a percentage of males Teaceable fixed expenses ENNE 380,000 50$ $ 291.000 Centen $ 620.000 378 S 322.000 West 550,000 314 $ 202,000 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 $26,000 based on the belief that it would increase that division's sales by 14%. 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 eutate proposar is plemented 2-b. Would you recommend the increased advertising? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2A Reg 28 Prepare a contribution format income statement segmented by divisions. Total Company Division Central East West 0 0 0 0 $ 0 $ 0 $ 0 $ 0 Req 2A > S 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 East $ 388.000 500 $ 291,000 Division Central $ 620,000 374 $ 322,000 West $ 550,000 311 $ 202,000 Required: 1. Prepare a contribution format income statement segmented by divisions. 2.a. The Marketing Pepartment has proposed increasing the West Division's monthly advertising by $26.000 based on the belief that it would increase that division's sales by 14%. 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 The Marketing Department has proposed increasing the West Division's monthly advertising by $26,000 based on the belief that it would increase that division's sales by 14%. 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 by Complete this question by entering your answers in the References Req 1 Reg 2A Reg 2B Would you recommend the increased advertising? OYes ONO
