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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
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, which followsS Sales Variable expenses $1,600,000 585,100 Contribution margin Fixed expenses 1,014,900 1,116,000 Net operating income (loss) $ (101,100) In an effort to isolate the problem, the president has asked for an income statement segmented by division Accordingly, the Accounting Department has developed the following information Division Central $400,000 $670,000 $530,000 East West Sales Variable expenses as a percentage of sales Traceable fixed expenses 62% 25% 32% $279,000 $337,000 $210,000 Required: 1. Prepare a contribution format income statement segmented by divisions, as desired by the president. Division Total Company East Central West 2-a. As a result of a marketing study, the president believes that sales in the West Division could be increased by 15% if monthly advertising in that division were increased by $22.000. Calculate the incremental net operating income Incremental net operating income
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