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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

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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: $ Variable expenses Contribution margin Fixed expenses Net operating income (loss) 1.598.000 676,340 1,821,66e 1, 124,000 (182, 340) $ 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 Central $698,000 Sales Variable expenses as a percentage of sales Traceable fixed expenses Last $418.000 SEX $290,000 $590,000 42% $200,000 5336,000 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 $30.000 based on the belief that it would increase that division's sales by 18. Assuming these estimates are accurate how much would the company's net operating income increase (decrease) if the proposal is implemented? 2-. Would you recommend the increased advertising? Prepare a contribution format income statement segmented by divisions. Division Central Total Company East West Sales Variable expenses Contribution margin Traceable fixed expenses Divisional segment margin Fixed manufacturing overhead Net operating loss Req 2A > The Marketing Department has proposed increasing the West Division's monthly advertising by $30,000 based on the belief that it would increase that division's sales by 18%. 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 Would you recommend the increased advertising? Yes No

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