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: omework Sales Variable expenses Contribution margin. Fixed expenses Net operating income (loss). $ 1,550,000 678,100 871,900 959,000 (87,100) 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 $420,000 Division Central $630,000 West $500,000 Variable expenses as a percentage of sales Traceable fixed expenses 62% 29% 47% $298,000 $325,000 $196,000 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 $30,000 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? 2-b. Would you recommend the increased advertising? to search E e < Prev 2 of 2 C Next