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	$ 1,614,000
Variable expenses	701,060
Contribution margin	912,940
Fixed expenses	1,004,000
Net operating income (loss)	$ (91,060)

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	$ 414,000	$ 650,000	$ 550,000
Variable expenses as a percentage of sales	54%	32%	49%
Traceable fixed expenses	$ 256,000	$ 328,000	$ 195,000

Required:

1. Prepare a contribution format income statement segmented by divisions.

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	$ 1,614,000
Variable expenses	701,060
Contribution margin	912,940
Fixed expenses	1,004,000
Net operating income (loss)	$ (91,060)

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	$ 414,000	$ 650,000	$ 550,000
Variable expenses as a percentage of sales	54%	32%	49%
Traceable fixed expenses	$ 256,000	$ 328,000	$ 195,000

Required:

1. Prepare a contribution format income statement segmented by divisions.

		Division
	Total Company	East	Central	West

2-a. The Marketing Department has proposed increasing the West Division's monthly advertising by $25,000 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?

Net operating income will

by.

2-b. Would you recommend the increased advertising?

Yes or no?