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 $ $1,581,000$

Variable expenses $603,970$

Contribution margin $977,030$

Fixed expenses $1,075,000$

Net operating income $($loss$)$ $ $(97,970)$

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 $ $391,000$ $ $670,000$ $ $520,000$

Variable expenses as a percentage of sales $47\%34\%37\%$

Traceable fixed expenses $ $265,000$ $ $339,000$ $ $205,000$

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 $20\%.$ 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?