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 follows: Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) $ 1,639,000 618,920 1,020.080 1,122,000 $ (101,920) In an effort isolate the problem, the president has asked for 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 $ 429,000 48 % $ 298.000 Division Central $ 680,000 28 % $ 328,000 West $ 530.000 42% $ 198.000 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 17% if monthly advertising in that division were increased by $22,000. Calculate the incremental net operating income. Incremental net operating income 2-b. Would you recommend the increased advertising? No Yes