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	$	1,551,000
Variable expenses		581,300
Contribution margin		969,700
Fixed expenses		1,067,000
Net operating income (loss)	$	(97,300)

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:

	Division
	East			Central			West
Sales	$	411,000		$	640,000		$	500,000
Variable expenses as a percentage of sales		50	%		22	%		47	%
Traceable fixed expenses	$	286,000		$	329,000		$	193,000

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 $23,000 based on the belief that it would increase that division's sales by 15%. 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?

Reg 1 Req 2A Req 2B Prepare a contribution format income statement segmented by divisions. Division Total Company East Central West Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B 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 15%. 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 will by