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, which follows: Sales $ 1,571,000 Variable expenses 564,890 Contribution margin 1,006,110 Fixed expenses 1,107,000 Net operating income (loss) $ (100,890) In an effort to isolate the problem, the president has asked for an income statement segmented by division. Accordingly, the Accounting Department has developed the following information: Division East Central West Sales $ 371,000 $ 630,000 $ 570,000 Variable expenses as a percentage of sales 49 % 21 % 44 % Traceable fixed expenses $ 257,000 $ 333,000 $ 204,000 Required: 1. Prepare a contribution format income statement segmented by divisions, as desired by the president. 2-a. As a result of a marketing study, the president believes that sales in the West Division could be increased by 15% if monthly advertising in that division were increased by $29,000. Calculate the incremental net operating income. 2-b. Would you recommend the increased advertising? Yes No