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Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses as shown by...

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Accounting

Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses as shown by its most recent monthly contribution format income statement:
Sales $ 1,657,000
Variable expenses 665,480
Contribution margin 991,520
Fixed expenses 1,091,000
Net operating income (loss) $ (99,480)
In an effort to resolve the problem, the company wants to prepare an income statement segmented by division. Accordingly, the Accounting Department provided the following information:
Division
East Central West
Sales $ 417,000 $ 680,000 $ 560,000
Variable expenses as a percentage of sales 44%33%46%
Traceable fixed expenses $ 257,000 $ 321,000 $ 209,000
Required:
1. Prepare a contribution format income statement segmented by divisions.
2-a. The Marketing Department believes increasing the West Division's monthly advertising by $28,000 will 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?

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