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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 $ 1,596,000 Variable expenses 705,360 Contribution margin 890,640 Fixed expenses 980,000 Net operating income (loss) $ (89,360) 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 $ 396,000 $ 660,000 $ 540,000 Variable expenses as a percentage of sales 56 % 34 % 48 % Traceable fixed expenses $ 290,000 $ 338,000 $ 196,000

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 Bales Variable expenses Contribution margin Fixed expenses Net operating income (10) $ 1,596,000 705, 360 890, 640 980,000 $ (89, 360) In an effort to resolve the problemthe company would like to prepare an Income statement segmented by division. Accordingly, the Accounting Department has developed the following information: Bales Variable expenses as a percentage of sales Traceable fixed expenses East $298,000 563 $290,000 Division Central $ 660,000 343 $338,000 West $540,000 483 $196,000 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 15%. Assuming these estimates are accurate, how much would the company's net operating Income Increase (decrease) If the proposal is Implemented? 2-5. Would you recommend the increased advertising? Complete this question by entering your answers in the tabs below. Reg 1 Reg 24 Reg 28 Prepare a contribution format income statement segmented by divisions. Division Total East Central West Company Rec Req 2A > Reg 1 Reg 2A Req 26 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 15%. 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 by ( Req 1 Req 2B > 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 would increase that division's sales by 15%. Assuming these estimates are accurate, how much would the company's net operating Income increase (decrease) If the proposal is Implemented? 25. Would you recommend the increased advertising? Complete this question by entering your answers in the tabs below. Reg 1 Reg 2A Reg 2B Would you recommend the increased advertising? Yes No

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