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

Sales	$ 1,652,000
Variable expenses	605,500
Contribution margin	1,046,500
Fixed expenses	1,151,000
Net operating income (loss)	$ (104,500)

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	$ 382,000	$ 690,000	$ 580,000
Variable expenses as a percentage of sales	55%	22%	42%
Traceable fixed expenses	$ 274,000	$ 336,000	$ 204,000

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 $24,000 will 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?

The Marketing Department believes increasing the West Division's monthly advertising by $24,000 will 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?

Note: Do not round intermediate calculations.

Would you recommend the increased advertising?