Shannon Company segments its income statement into its North and South Divisions. The company's overall sales, contribution margin ratio, and net operating income are $480,000, 36%, and $9,600, respectively. The North Division's contribution margin and contribution margin ratio are $92,000 and 40%, respectively. The South Division's segment margin is $32,500. The company has $62,400 of common fixed expenses that cannot be traced to either division. Required: Prepare an income statement for Shannon Company that uses the contribution format and is segmented by divisions. In addition, for the company as a whole and for each segment, show each item on the segmented income statements as a percent of sales. (Round your percentage answers to 1 decimal place (i.e.1234 should be entered as 12.3).) Total Company Amount % North Amount Divisions South % Amount % Sales 480,000 Variable expenses Contribution margin Traceable fixed expenses Territorial segment margin Common fixed expenses Net operating income 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 $1,515,000 Variable expenses 670, 100 Contribution margin 844,900 Fixed expenses 929,000 Net operating income (loss) $ (84,100) 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: Division East Central $375,000 $610,000 West $530,000 Sales Variable expenses as a percentage of sales Traceable fixed expenses 46% 39% 49% $251,000 $327,000 $202,000 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 $21,000 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? 2-b. Would you recommend the increased advertising? Complete this question by entering your answers in the tabs below. Reg 1 Req 2A Req 2B Prepare a contribution format income statement segmented by divisions. Total Company East Division Central West 0 0 0 T o $ 0 $ 0 $ 0 $ 0TT The Marketing Department has proposed increasing the West Division's monthly advertising by $21,000 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.) Show less Net operating income will Raner, Harris & Chan is a consulting firm that specializes in information systems for medical and dental clinics. The firm has two offices-one in Chicago and one in Minneapolis. The firm classifies the direct costs of consulting jobs as variable costs. A contribution format segmented income statement for the company's most recent year is given: Assume that Minneapolis' sales by major market are: Market Minneapolis Medical Dental Sales $510,000 100% $340,000 100% $170,000 100% Variable expenses 306,000 60% 221,000 65% 85,000 508 Contribution margin 204,000 40% 119,000 35% 85,000 50% Traceable fixed expenses 61,200 12% 17,000 5% 44,200 26% Market segment margin 142,800 28% $102,000 30% $ 40,800 24% Common fixed expenses not traceable to markets 15,300 38 Office segment margin $127,500 25% The company would like to initiate an intensive advertising campaign in one of the two market segments during the next month. The campaign would cost $6,800. Marketing studies indicate that such a campaign would increase sales in the Medical market by $59,500 or increase sales in the Dental market by $51,000. Required: 1. How much would the company's profits increase (decrease) if it implemented the advertising campaign in the Medical Market? 2. How much would the company's profits increase (decrease) if it implemented the advertising campaign in the Dental Market? 3. In which of the markets would you recommend that the company focus its advertising campaign? Complete this question by entering your answers in the tabs below. Required Required Required How much would the company's profits increase (decrease) if it implemented the advertising campaign in the Medical Market? Company's profits by Required Required Required How much would the company's profits increase (decrease) if it implemented the advertising campaign in the Dental Market? Company's profits Raner, Harris & Chan is a consulting firm that specializes in information systems for medical and dental clinics. The firm has two offices-one in Chicago and one in Minneapolis. The firm classifies the direct costs of consulting jobs as variable costs. A contribution format segmented income statement for the company's most recent year is given: Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Net operating income Total Company $712,500 100.0% 384,750 54.0% 327,750 46.0% 159,600 22.4% 168,150 23.6% Office Chicago Minneapolis $142,500 100% $570,000 100% 42,750 30% 342,000 60% 99,750 70% 228,000 40% 74,100 52% 85,500 15% $ 25, 650 18% $142,500 25% 114,000 $ 54,150 16.0% 7.6% Exercise 6-16 Part 1 Required: 1-a. Compute the companywide break-even point in dollar sales. 1-b. Compute the break-even point for the Chicago office and for the Minneapolis office. 1-c. Is the companywide break-even point greater than, less than, or equal to the sum of the Chicago and Minneapolis break-even points? Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 1C Compute the companywide break-even point in dollar sales. (Round "CM ratio" to 2 decimal places and final answers to the nearest whole dollar amount.) Break-even point in dollar sales Compute the break-even point for the Chicago office and for the Minneapolis office. (Round "CM ratio" to 2 decimal places and final answers to the nearest whole dollar amount.) Break- even Point Chicago office Minneapolis office 2. By how much would the company's net operating income increase if Minneapolis increased its sales by $71,250 per year? Assume no change in cost behavior patterns. Net operating income increase