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) $ 1,634,000 655,900 978,100 1,076,000 $(97,900) In an efforto 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 Bast $404,000 550 $277,000 Division Central $650,000 238 $330,000 West $580,000 498 $204,000 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 17%. 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? Reg 1 Req 2A Reg 2B Prepare a contribution format income statement segmented by divisions. Sales Variable expenses Contribution margin Traceable fixed expenses Divisional segment margin Common fixed expenses not traceable to divisions Net operating loss Division Total Company East Central West $ 1,634,000 $ 404,000 $ 650,000 $ 580,000 655,900 978,100 404,000 650,000 580,000 811,000 277,000 330.000 204,000 167,100 $ 127,000 $ 320,000 $ 376,000 $ 167.100 Help Save & Exit Submit Check my work would increase that division's sales by 17%. 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 Reg 2A Reg 28 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 17%. 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 increase by 1. Prepare a contribution format income statement segmented by 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 17%. 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 Reg 2A Reg 2B Would you recommend the increased advertising? Yes ONO Reg 23
