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	$ 1,639,000
Variable expenses	580,010
Contribution margin	1,058,990
Fixed expenses	1,165,000
Net operating income (loss)	$ (106,010)

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	West
Sales	$ 359,000	$ 690,000	$ 590,000
Variable expenses as a percentage of sales	59%	26%	32%
Traceable fixed expenses	$ 296,000	$ 330,000	$ 200,000

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 $27,000 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?