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 Fixed expenses Net operating income (loss) $ 1,630,000 596,400 1,033,600 1,137,000 (103,400) 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 East $420,000 526 Division Central $640,000 West $570,000 27 369 $ 263,000 $ 338,000 $ 199,000 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 $26,000 based on the belief that it would increase that division's sales by 20%. 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? Req 1 Req 2A Req 2B Prepare contribution format income statement segmented by divisions. Sales Variable expenses Contribution margin Traceable fixed expenses Contribution margin Common fixed expenses not traceable to divisions Net operating income Division Total Company East $ Central West 1,630,000 $420,000 $640,000 $570,000 596,400 218,400 172,800 205,200 1,033,600 201,600 467,200 364,800 1,033,600 $201,600 $ 467,200 $ 364,800 $ 1,033,600 Req 1 Req 2A > Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 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 20%. 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 tabs below. Req 1 Req 2A Req 28 Would you recommend the increased advertising? Yes ONO