Exercise 6-11 Segmented Income Statement (LO6-4] 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 $1,529,000 Variable expenses 566,020 Contribution margin 962,980 Fixed expenses 1,059,000 Net operating income (loss) $ (96,020) 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 $379,000 $640,000 West $510,000 Sales Variable expenses as a percentage of sales Traceable fixed expenses 58% 27% 34% $295,000 $333,000 $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 $25,000 based on the belief that it would increase that division's sales by 12%. 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. Req1 Req 2A Req 2B Prepare a contribution format income statement segmented by divisions. Total Company Division Central East West 0 0 0 0 $ 0 $ 0 $ 0 $ 0 Reg 1 Req 2A > Exercise 6-11 Segmented Income Statement [LO6-4) 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 $1,529,000 Variable expenses 566,020 Contribution margin 962,980 Fixed expenses 1,059,000 Net operating income (loss) $ (96,020) 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 $379,000 $640,000 West $510,000 Sales Variable expenses as a percentage of sales Traceable fixed expenses - 588 278 34% $295,000 $333,000 $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 $25,000 based on the belief that it would increase that division's sales by 12%. 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. Req1 Req 2A Req 2B The Marketing Department has proposed increasing the West Division's monthly advertising by $25,000 based on the belief that it would increase that division's sales by 12%. 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 Exercise 6-11 Segmented Income Statement (LO6-4) 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 $1,529,000 Variable expenses 566,020 Contribution margin 962,980 Fixed expenses 1,059,000 Net operating income (loss) $ (96,020) 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 $379,000 $640,000 $510,000 Sales Variable expenses as a percentage of sales Traceable fixed expenses 58% $295,000 27% $333,000 34% $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 $25,000 based on the belief that it would increase that division's sales by 12%. 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. Req1 Req 2A Req 2B Would you recommend the increased advertising?