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 $20,000 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?

Exercise 6-11 (Algo) 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 Variable expenses. Contribution margin Fixed expenses Net operating income (loss) 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: Sales Variable expenses as a percentage of sales Traceable fixed expenses $ 1,728,000 714,180 1,013,820 1,115,000 $ (101,180) Req 1 Req 2A East $ 438,000 $ 251,000 Reg 28 46% Complete this question by entering your answers in the tabs below. Division Central $ 700,000 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 $20,000 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? Prepare a contribution format income statement segmented by divisions. 37% $ 332,000 West $ 590,000 43% $ 207,000 W Sales Variable expenses as a percentage of sales Traceable fixed expenses East $ 438,000 46% $ 251,000 Division Central $ 700,000 37% $ 332,000 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 $20,000 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. Req 1 Req 2A Req 2B Prepare a contribution format income statement segmented by divisions. Total Company East West $ 590,000 43% $ 207,000 Reg 2A > Division Central West Sales Variable expenses as a percentage of sales Traceable fixed expenses Req 1 Req 2A Req 28 East $ 438,000 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 $20,000 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. 46% by $ 251,000 Accounting Department has developed the following information: Sales Variable expenses as a percentage of sales Traceable fixed expenses Req 1 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 $20,000 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. Req 2A Would you recommend the increased advertising? OYes ONO Req 28 East $ 438,000 46% $ 251,000 Division Central $ 700,000 37% $ 332,000