Exercise 6-11 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, which follows: Sales $ 1,572,000 Variable expenses 552,040 Contribution margin 1,019,960 Fixed expenses 1,122,000 Net operating income (loss) $ (102,040) In an effort to isolate the problem, the president has asked for an income statement segmented by division. Accordingly, the Accounting Department has developed the following information: Division East Central West Sales $ 372,000 $ 670,000 $ 530,000 Variable expenses as a percentage of sales 52 % 29 % 31 % Traceable fixed expenses $ 281,000 $ 333,000 $ 208,000 Required: 1. Prepare a contribution format income statement segmented by divisions, as desired by the president. 2-a. As a result of a marketing study, the president believes that sales in the West Division could be increased by 16% if monthly advertising in that division were increased by $20,000. Calculate the incremental net operating income. 2-b. Would you recommend the increased advertising? No Yes