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 Contribution margin Fixed expenses Het operating income (Loss) $ 1,602,000 687.960 914,040 1,005,000 $ 190,960) 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 $372,000 Sales Variable expenses as a percentage of sales Traceable fixed expenses Division Centras $600,000 295 $338,000 West $550,000 SON $191,000 $277,000 Required: 1. Prepare a contribution format income statement segmented by divisions. 2-0. The Marketing Department has proposed increasing the West Division's monthly advertising by $28,000 based on the belief that it would increase that division's sales by 15%. 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? Reg 1 Req 2A Reg 2B Prepare a contribution format income statement segmented by divisions. Total Company Division Central East West Reg Req2A > Sales Variable expenses as a percentage of sales Traceable fixed expenses East $372,000 581 $277,000 Central $680,000 298 $338,000 West $550,000 500 $191,000 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 $28,000 based on the be would increase that division's sales by 15%. Assuming these estimates are accurate, how much would the company's net oper 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 28 The Marketing Department has proposed increasing the West Division's monthly advertising by $28,000 based on the belief that it would increase that division's sales by 15%. Assuming these estimates are accurate, how much would the company's net operating income increase (decrease) If the proposal is Implemented? (Do not round intermediate calculations.) Net operating income will by Sales Variable expenses as a percentage of sales Traceable fixed expenses East $372,000 588 $277,000 Division Central $680,000 298 $338,000 West $550,000 509 $191,000 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 $28,000 based on the belief that would increase that division's sales by 15%. 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 this question by entering your answers in the tabs below. Reg 1 Reg 2A Reg 28 Would you recommend the increased advertising? Yes ON
