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	$	1,519,000
Variable expenses		521,740
Contribution margin		997,260
Fixed expenses		1,097,000
Net operating income (loss)	$	(99,740)

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	$	409,000		$	600,000		$	510,000
Variable expenses as a percentage of sales		46	%		25	%		36	%
Traceable fixed expenses	$	256,000		$	327,000		$	196,000

1. Prepare a contribution format income statement segmented by divisions, as desired by the president.

		Division
	Total Company	East	Central	West

2. 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 $22,000. Calculate the incremental net operating income.

Incremental net operating income