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 Het operating income (Loss) 5 1,637,000 628,830 1,003,170 1,109,000 $ (100,830) 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 $367,000 Division Central $630,000 32x $339,000 West $590,000 Sales Variable expenses as a percentage of sales Traceable fixed expenses 59 $299,000 $200,000 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 $24,000 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) of the proposal is Implemented? 2 b. Would you recommend the increased advertising? Complete this question by entering your answers in the tabs below. Complete this question by entering your answers in the tabs below. Reg 1 Req 2A Req 28 Prepare a contribution format income statement segmented by divisions. Division Central Total Company East West 0 0 0 0 0 $ 0 $ 0 $ $ 0 3 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 $24,000 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. Would you recommend the increased advertising? 166 point Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 26 References The Marketing Department has proposed increasing the West Division's monthly advertising by $24,000 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.) Not operating income by 5297,000 $339,000 3 $20,000 Traceable fixed mes 165 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 $24.000 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 of the proposal is implemented? 2b. Would you recommend the increased advertising? Complete this question by entering your answers in the tabs below. Print ilegt Hng 2A Red 20 Would you recommend the increased advertising? xos ONO
