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 $ 1.597.000 Variable expenses 670.340 Contribution margin 926,660 Fixed expenses 1.019,000 Net operating incone (loss) 3 (92,340) 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 West Sales $ 417,000 5660,000 $ 520,000 Variable expenses as a percentage of sales 42% 38% 47% Traceable fixed expenses $ 291,000 5 324,000 $ 192,000 Required: 1. Prepare a contribution format income statement segmented by divisions 2a The Marketing Department has proposed increasing the West Division's monthly advertising by $22,000 based on the belief that it would increase that division's sales by 10%. Assuming these estimates are accurate, how much would the company's net operating income increase (decrease) if the proposal is implemented? 2-5 Would you recommend the increased advertising? -nces Complete this question by entering your answers in the tabs below. Reg 1 Req 2A Req 2B Prepare a contribution format income statement segmented by divisions. Division East Central West Total Company $ 1,597,000 670 340 926,660 0 0 0 Sales (Variable expenses Contribution margin Traceable fixed expenses Divisional segment margin Common fixed expenses not traceable to divisions Net operating loss 90,240 $ (90,240) 0 926,660 $ $ 0 926,660 Rea Reg 2 > Required: 1. Prepare a contribution format income statement segmented by divisions. 2-a. The Marketing Department has proposed increasing the West Division's monthly adver it would increase that division's sales by 10%. Assuming these estimates are accurate, how 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. Reg 1 Req 2A Req 2B The Marketing Department has proposed increasing the West Division's monthly advertising by that it would increase that division's sales by 10%. Assuming these estimates are accurate, how net operating income increase (decrease) if the proposal is implemented? (Do not round interm Net operating income will increase by it would increase that division's sales by 10%. Assuming income increase (decrease) if the proposal is implemen 2-b. Would you recommend the increased advertising? Complete this question by entering your answers Reg 1 Reg 2A Req 2B Would you recommend the increased advertising? Yes No
