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Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as shown its most recent monthly contribution format income statement
Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as shown its most recent monthly contribution format income statement 5 Sales Variable expenses Contribution margin Fixed expenses points $ 1,584,000 674,100 909,900 1,001,000 (91,100) eBook Net operating income (loss) Hint Print 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: References Diviaion East Central West $414,000 45 Sales $630,000 $540,000 Variable expenses as a percentage of sales Traceable fixed expenses 468 $191,000 38% $266,000 $330,000 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 $24,000 based on the belief that it would increase that division's sales by 15% . 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
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