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 Net operating income (loss) $ 1,668,000 617,860 1,050, 140 1,155,000 $ (104,860) 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 $428,000 Sales Variable expenses as a percentage of sales Traceable fixed expenses Division Central $690,000 27 $328,000 525 West $550,000 38% $201.800 $255,000 5 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 $27,000 based on the belief that it would 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? Complete this question by entering your answers in the tabs below. Reg 1 Req 2A Reg 28 Prepare a contribution format income statement segmented by divisions. Division Prev 1 of 4 Next > Sales Variable expenses as a percentage of sales Traceable fixed expenses East $428,000 52% $255,000 Division Central $690,000 27 $328,000 West $550,000 384 $201,000 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 $27,000 based on the belief that it would 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? 2-6. Would you recommend the increased advertising? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2A Reg 2B Prepare a contribution format income statement segmented by divisions. Total Company Division Central East West Reg 2A > Prev 1 of 4 RE Next Sales Variable expenses as a percentage of sales Traceable fixed expenses East $428,000 52% $255,000 Division Central $690,000 27% $328,000 West $550,000 38% $201,000 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 $27,000 based on the belief that it would 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? Complete this question by entering your answers in the tabs below. Reg 1 RB 2A Reg 28 The Marketing Department has proposed increasing the West Division's monthly advertising by $27,000 based on the belief that it would 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? (Do not round Intermediate calculations.) Net operating income win 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: Sales Variable expenses as a percentage of sales Traceable fixed expenses East $428,000 52 $255,000 Division Central $690,000 27 $328,000 West $550,000 384 $201,000 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 $27,000 based on the belief that it would 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? Complete this question by entering your answers in the tabs below. Req1 Req 2A Req 2B Would you recommend the increased advertising? Yes No
