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 (10) $ 1,604,000 660720 943,280 1,038,000 $ (94,720) 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 $364,000 Division Central $640,000 West $600,000 Sales Variable expenses as a percentage of sales Traceable fixed expenses 58 293 $285,000 $324,000 44 $206,000 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 $24,000 based on the belief that it would increase that division's sales by 19%. 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? 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 $24,000 based on the belief that it would increase that division's sales by 19%. 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. Req 1 Reg 2A Req 2B Prepare a contribution format income statement segmented by divisions. Division Central Total Company East West 0 0 0 S 0S 1 $ 0 Req 2A > East $364,000 Division Central $640,000 West $600,000 Sales Variable expenses as a percentage of sales Traceable fixed expenses 588 $285,000 29442 $324,000 $206,000 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 $24,000 based on the belief that would increase that division's sales by 19%. 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 Req 2B The Marketing Department has proposed increasing the West Division's monthly advertising by $24,000 based on the belief that it would increase that division's sales by 19%. 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.) Show less Net operating income will by Req 2B > 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 $364,000 Division Central $640,000 West $600,000 Sales Variable expenses as a percentage of sales Traceable fixed expenses 298 58 $285,000 $324,000 443 $206,000 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 $24,000 based on the belief that it would increase that division's sales by 19%. 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. Req 1 Req 2A Reg 2B Would you recommend the increased advertising? Yes ONO
