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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
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) $ 1,652,000 593,280 1,058,720 1,165,000 $ (106,280) 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: Division East Sales $ 442,000 Central $690,000 Variable expenses as a percentage of sales Traceable fixed expenses 548 228 $ 289,000 $339,000 Required: West $520,000 39 $ 192,000 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 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? Req 1 Req 2A Req 28 Prepare a contribution format income statement segmented by divisions. Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 28 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 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. Net operating income will by < Req 1 Req 2B > Show less A 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 would increase that division's sales by 15%. Assuming these estimates are accurate, how much would the co income increase (decrease) if the proposal is implemented? 2-b. Would you recommend the increased advertising? Complete this question by enteril Assessment Tool iFrame the tabs below. Req 1 Req 2A Req 2B Would you recommend the increased advertising? O Yes ONO < Req 2A Req 2B
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