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 $ 1,645,000 Variable expenses 549,100 Contribution margin 1,095,900 Fixed expenses 1,205,000 Net operating income (loss) $ (109,100) 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 $ 395,000 $ 670,000 $ 580,000 Variable expenses as a percentage of sales 52 % 21 % 35 % Traceable fixed expenses $ 255,000 $ 336,000 $ 191,000 Required: 1. 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 15% if monthly advertising in that division were increased by $25,000. Calculate the incremental net operating income. 2-b. Would you recommend the increased advertising? Yes No rev: 07_08_2014_QC_50927