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:

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:

Required:

Prepare a contribution format income statement segmented by divisions.

$2-$a$.$ The Marketing Department has proposed increasing the West Division's

monthly advertising by $$26,000$ 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?

Prepare a contribution format income statement segmented by divisions.

Complete this question by entering your answers in the tabs below.

Would you recommend the increased advertising?