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 Fixed expenses Contribution margin Net operating income (loss) $ 1,560,000 636,500 923,500 1,016,000 $ (92,500) 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 $ 360,000 Variable expenses as a percentage of sales 42% $ 291,000 Traceable fixed expenses Required: Division Central $610,000 West $ 590,000 37% 44% $ 336,000 $210,000 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 $23,000 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? Answer is complete but not entirely correct.