Exercise 6-11 Segmented Income Statement (L06-4) bene losses for some time, as shown by its most Wingate Company, a wholesale distributor of electronic equipment, has recent monthly contribution format income statement: $ Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) 1.506,00 469,489 ,036,600 1.140.000 (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: Division Central $600,000 205 $337,000 West $530,000 $376,000 Variable expenses as a percentage of sales Traceable fixed expenses $265,000 $205,000 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 $29,000 based on the belief that it would increase that division's sales by 11%. 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 $29,000 based on the belief that it would increase that division's sales by 11%. Assuming these estimates are accurate, how much would the company's net operating income increase (decrease) if the proposal is implemented? 2b. Would you recommend the increased advertising? Complete this question by entering your answers in the tabs below. Req 1 Reg 2 Req 2B Prepare a contribution format income statement segmented by divisions. Division Central Total Company East West : 0 0 Sales Variable expenses Contribution margin Traceable foxed expenses Divisional segment margin Common faced expenses not traceable to divisions het operating loss OOOO 050 S S Ru5 et 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 $29,000 based on the belief that would increase that division's sales by 11%. 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 2A Req 28 The Marketing Department has proposed increasing the West Division's monthly advertising by $29,000 based on the belief that it would increase that division's sales by 11%. 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 ( Req1 Reg 2B >
