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Fixed expenses Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as shown by its most recent monthly contribution
Fixed expenses 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 $ 1,557,000 617.720 Contribution margin 939, 280 1,033,000 Net operating income (loss) $ (93,720) 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 East Central Sales $ 427,000 $ 610,000 $ 520,000 Variable expenses as a percentage of sales Traceable fixed expenses $ 284,000 $ 336,080 $ 193,000 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 $27,000 based on the belief that it would increase that division's sales by 19%. 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? West 464 299 47 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
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