Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as shown by its most recent monthly contribution fom'lat income
Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as shown by its most recent monthly contribution fom'lat income statement: Sales 5 1,604,000 Variable expenses 647,240 Contribution margin 956,?60 Fixed expenses 1,052,000 Net operating income (loss) $ (95,240) 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 Central West Sales 5 444,000 $ 660,000 $ 500,000 Variable expenses as a percentage of sales 06% 30% 49% Traceable fixed expenses 5 251,000 5 330,000 S 198,000 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 $27,000 based on the belief that it would increase that division's sales by 11%. 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? Complete thle question by entering your answers In the tabs below. Req 1 Reg 2A Reg 2B Prepare a contribution format income statement segmented by divisions. Division Total Company East Central West Sales Variable expenses Contribution margin 0 0 0 Traceable fixed expenses Divisional segment margin $ 0 $ 0 $ Common fixed expenses not traceable to divisions Net operating income 0Required information [The following information applies to the questions displayed below.] Chuck Wagon Grills, Incorporated, makes a single product-a handmade specialty barbecue grill that it sells for $210. Data for last year's operations follow: Units in beginning inventory 0 Units produced 22,000 Units sold 20,000 Units in ending inventory 2,000 Variable costs per unit: Direct materials $ 50 Direct labor 80 Variable manufacturing overhead 20 Variable selling and administrative 10 Total variable cost per unit $ 160 Fixed costs: Fixed manufacturing overhead $ 770,000 Fixed selling and administrative 300,000 Total fixed costs $ 1, 070, 000Complete this question by entering your answers in the tabs below. Required 1 Required 2 Assume that the company uses absorption costing. Prepare an income statement for last year. Chuck Wagon Grills, Incorporated Absorption Costing Income Statement Sales Cost of goods sold Gross margin 0 Selling and administrative expenses Net operating income(loss) 0
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