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 Variable expenses Contribution margin Fixed expenses Net operating income (loss) $ 1,680,000 716,000 964,000 1,060,000 $ (96,000) 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: East Sales $ 440,000 Division Central $ 680,000 West $ 560,000 Variable expenses as a percentage of sales Traceable fixed expenses 46% 36% 48% $ 259,000 $ 336,000 $ 205,000 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 $28,000 based on the belief that it would increase that division's sales by 19%. 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? Req 1 Req 2A Req 2B Prepare a contribution format income statement segmented by divisions. Division Sales Variable expenses Total Company $ 1,680,000 East Central West $440,000 $680,000 $560,000 716,000 202,400 244,800 268,800 Contribution margin 964,000 237,600 435,200 291,200 Traceable fixed expenses 248,000 x 259,000 336,000 205,000 Divisional segment margin 716,000 $(21,400) $ 99,200 $ 86,200 Common fixed expenses not traceable to divisions 812,000 Net operating loss $ (96,000) The Marketing Department has proposed increasing the West Division's monthly advertising by $28,000 based on the belief that it would increase that division's sales by 19%. Assuming these estimates are accurate, how much would the company's net operating income increase (decrease) if the proposal is implemented? (Do not round intermediate calculations.) Net operating income will increase by