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) $ 1,599,000 526,980 1,072,020 1,179,000 $ (106,980) 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 $ 399,000 Division Central $ 660,000 West $ 540,000 Variable expenses as a percentage of sales Traceable fixed expenses 42% 25% 36% $ 283,000 $ 321,000 $ 202,000 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 $21,000 based on the belief that it would increase that division's sales by 16%. 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. Sales Variable expenses Division Total Company East Central West $ 1,599,000 $ 399,000 526,980 $ 660,000 $ 540,000 1,072,020 399,000 660,000 540,000 283,000 321,000 202,000 1,072,020 $ 116,000 $ 339,000 $ 338,000 Contribution margin Traceable fixed expenses Divisional segment margin Common fixed expenses not traceable to divisions Net operating loss $ 1,072,020 Req 1 Req 2A Req 2B The Marketing Department has proposed increasing the West Division's monthly advertising by $21,000 based on the belief that it would increase that division's sales by 16%. 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 < Req 1 Req 2B >