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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 follows Sales Variable expenses $ 1,505,000 555,050 Contribution margin Fixed expenses 949,950 1,045,000 Net operating income (loss) $ (95,050) 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 $395,000 $600,000 $510,000 East West Sales Variable expenses as a percentage of sales Traceable fixed expenses 55% 24% 38% $268,000 $338,000 $199,000 Required a. Prepare a contribution format income statement segmented by divisions, as desired by the president. DivISIon Total Company East Central West Sales ariable expenses Contribution margin raceable fixed expenses Divisional segment margin Common fixed expenses not traceable to divisions et operating loss b. As a result of a marketing study, the president believes that sales in the West Division could be increased by 20% if monthly advertising in that division were increased by $28,000. Calculate the incremental net operating income Incremental net operating income
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