Exercise 7-11 Segmented Income Statement (LO7-4) Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as shown by its most E recent monthly contribution format Income statement: Sales $1,000,000 Variable expenses 390,000 Contribution margin 610,000 Fixed expenses 625,000 Net operating income (loss) $ (15,000) 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 Sales $250,000 Variable expenses as a percentage of sales 52% Traceable fixed expenses $160,000 Division Central $400,000 30% $200,000 West $350,000 40% $175,000 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 $15.000 based on the belief that it would increase that division's sales by 20%. 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 $15,000 based on the belief that it would increase that division's sales by 20%. 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. Req 1 Req 2A Reg 2B Prepare a contribution format income statement segmented by divisions. Division Total Company East Central West Req1 Req 2A > Complete this question by entering your answers in the tabs below. Req 1 Reg 2A Req 2B The Marketing Department has proposed increasing the West Division's monthly advertising by $15,000 based on the belief that it would increase that division's sales by 20%. Assuming these estimates are accurate, how much would the company's net operating income increase (decrease) if the proposal is implemented? Net operating income will by Complete this question by entering your answers in the tabs below. Reg 1 Req 2A Reg 2B Would you recommend the increased advertising? Yes No ( Req 2A Reg 2B )