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Hey, can you please help me with part 2-a only? Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time,
Hey, can you please help me with part 2-a only?
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) $ 1,590,000 659, 100 930,900 1,024,000 $ (93,100) 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 $360,000 53% $278,000 Division Central $660,000 39% $330,000 West $570,000 37% $203,000 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 13%. 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 advertisingStep by Step Solution
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