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:

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:

Required:

Prepare a contribution format income statement segmented by divisions.

$2-a.$ The Marketing Department has proposed increasing the West Division's monthly advertising by $$23,000$ based on the belief that it

would increase that division's sales by $20\%.$ 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?

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