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 14% if monthly advertising in that division were increased by $29,000. Calculate the incremental net operating income.

2-b. Would you recommend the increased advertising?

	Yes
	No

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 Variable expenses Contribution margin Fixed expenses Net operating income (loss) S 1,584,000 610,020 973,980 1.071,000 s (97,020) 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 Central 650,000 East West $434,000 500,000 Sales Variable expenses as a percentage of sales Traceable fixed expenses 53 % 20 % 50% 261,000 $ 337,000 $ 204,000