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	$	1,635,000
Variable expenses		553,100
Contribution margin		1,081,900
Fixed expenses		1,190,000
Net operating income (loss)	$	(108,100)

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	$	415,000		$	650,000		$	570,000
Variable expenses as a percentage of sales		48	%		22	%		37	%
Traceable fixed expenses	$	292,000		$	331,000		$	208,000

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 $28,000 based on the belief that it would increase that division's sales by 16%. 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.

		Division
	Total Company	East	Central	West
	0	0	0	0
	0	$0	$0	$0
	$0

• The Marketing Department has proposed increasing the West Division's monthly advertising by $28,000 based on the belief that it would increase that division's sales by 16%. 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

  by

• Would you recommend the increased advertising?

  	yes no