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Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses as shown by its most recent monthly contribution format income statement: Sales $

Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses as shown by its most recent monthly contribution format income statement:
Sales $ 1,651,000
Variable expenses 722,770
Contribution margin 928,230
Fixed expenses 1,021,000
Net operating income (loss) $ (92,770)
In an effort to resolve the problem, the company wants to prepare an income statement segmented by division. Accordingly, the Accounting Department provided the following information:
Division
East Central West
Sales $ 401,000 $ 670,000 $ 580,000
Variable expenses as a percentage of sales 57%40%39%
Traceable fixed expenses $ 291,000 $ 324,000 $ 191,000
Required:
1. Prepare a contribution format income statement segmented by divisions.
2-a. The Marketing Department believes increasing the West Division's monthly advertising by $27,000 will increase that division's sales by 11%. 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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