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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 income
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
$1,589,000 661,430 927,570 1,020,000 Sales Variable expenses Contribution margin Fixed expenses $ (92,430) Net operating income (loss) 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 Central East West $359,000 $700,000 Sales $530,000 Variable expenses as a percentage of sales Traceable fixed expenses 578 388 368 $254,000 $324,000 $197,000 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 $24,000 based on the belief that it would increase that division's sales by 13%. Assuming these estimates are accurate, how much would the company'ss net operating income increase (decrease) if the proposal is implemented? 2-b. Would you recommend the increased advertising? Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Prepare a contribution format income statement segmented by divisions. Division Total Central East West Company Sales Variable expenses Contribution margin 0 0 0 0 Traceable fixed expenses Divisional segment margin Common fixed expenses not traceable to divisions Net operating loss O$ 0$ 0 Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B The Marketing Department has proposed increasing the West Division's monthly advertising by $24,000 based on the belief that it would increase that division's sales by 13%. 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.) Show less Net operating income will byStep by Step Solution
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