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) $ 1,549,000 551,230) 997,770 1,098,000 $ (100,230) 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 $389,000 Sales Variable expenses as a percentage of sales Traceable fixed expenses 47% Division Central $660,000 24% $281,000 $ 334,000 Required: West $500,000 42% $ 202,000 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 $20,000 based on the belief that it would increase that division's sales by 17%. 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?