Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses as shown by its most recent monthly contribution format income statement:

Sales	$ 1,590,000
Variable expenses	592,200
Contribution margin	997,800
Fixed expenses	1,098,000
Net operating income (loss)	$ (100,200)

In an effort to resolve the problem, the company wants to prepare an income statement segmented by division. Accordingly, the Accounting Department provided the following information:

	Division
East	Central	West
Sales	$ 380,000	$ 640,000	$ 570,000
Variable expenses as a percentage of sales	53%	29%	36%
Traceable fixed expenses	$ 298,000	$ 323,000	$ 207,000

Required:

1. Prepare a contribution format income statement segmented by divisions.

2-a. The Marketing Department believes increasing the West Division's monthly advertising by $25,000 will increase that division's sales by 17%. 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?