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, which follows:

Sales	$	1,670,000
Variable expenses		636,700
Contribution margin		1,033,300
Fixed expenses		1,137,000
Net operating income (loss)	$	(103,700)

In an effort to isolate the problem, the president has asked for an income statement segmented by division. Accordingly, the Accounting Department has developed the following information:

	Division
	East			Central			West
Sales	$	440,000		$	630,000		$	600,000
Variable expenses as a percentage of sales		47	%		33	%		37	%
Traceable fixed expenses	$	279,000		$	332,000		$	200,000

Prepare a contribution format income statement segmented by divisions, as desired by the president.

2-a.	As a result of a marketing study, the president believes that sales in the West Division could be increased by 17% if monthly advertising in that division were increased by $22,000. Calculate the incremental net operating income.

Would you recommend the increased advertising?