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$)$

$[$$$1,600,000],[584,400],[1,015,600],[1,117,000],[$$$(101,400)]$

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:

Required:

Prepare a contribution format income statement segmented by divisions.

$2-$a$.$ The Marketing Department has proposed increasing the West Division's monthly advertising by $$25,000$ 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 advertising?

Complete this question by entering your answers in the tabs below.

Prepare a contribution format income statement segmented by divisions.