Exercise 6-11 (Algo) Segmented Income Statement [LO6-4] Wingate Company, a wholesale distributor of electronic equipment, has...

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Exercise 6-11 (Algo) Segmented Income Statement [LO6-4] Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses as shown by its most recent monthly contribution format income statement: Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) $ 1,539,000 597,930 941,070 1,035,000 $ (93,930) 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: East Sales $ 409,000 Division Central $ 600,000 West $ 530,000 Variable expenses as a percentage of sales Traceable fixed expenses 57% 29% 36% $ 265,000 $ 329,000 $ 196,000 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 $29,000 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? Complete this question by entering your answers in the tabs below. Exercise 6-11 (Algo) Segmented Income Statement [LO6-4] Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses as shown by its most recent monthly contribution format income statement: Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) $ 1,539,000 597,930 941,070 1,035,000 $ (93,930) 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: East Sales $ 409,000 Division Central $ 600,000 West $ 530,000 Variable expenses as a percentage of sales Traceable fixed expenses 57% 29% 36% $ 265,000 $ 329,000 $ 196,000 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 $29,000 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? Complete this question by entering your answers in the tabs below.

Answer rating: 100% (QA)

Analysis 1 East Division Sales 409000 Variable Expenses 60 of sales 06 409000 245400 Contribution Margin Sales Variable Expenses 409000 245400 163600 ... View the full answer