Exercise 6-11 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 (loss) $ 1,618,000 701, 140 916,860 1,009,000 $ (92,140) 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 $420,000 534 $262,000 Division Central $680,000 33 $326,000 West $510,000 494 3198,000 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 $23,000 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? 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 $23,000 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 Reg 2A Reg 28 Prepare a contribution format income statement segmented by divisions Division Central Total Company East West Req2A > Variable expenses as a percentage of sales Traceable fixed expenses 53 $262,00 334 $326,000 499 $190,000 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 $23,000 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. Reg1 Reg 2A Reg 20 The Marketing Department has proposed increasing the West Division's monthly advertising by $23,000 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
