looking for the net operating income increase when advertising increases by $28,000

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: Sales Variable expenses contribution margin Fixed expenses Net operating income (loss) $ 1,622,000 584,540 1,037, 460 1,141,000 $ (103,540) 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 Central $ 650,000 21% 327,000 East $ 442,000 57% $ 281,000 West S 530,000 37% $ 204,000 Sales Variable expenses as a percentage of sales Traceable fixed expenses 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 $28,000 based on the belief that it would increase that division's sales by 13%. 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. Reg 1 Reg za Req 28 The Marketing Department has proposed increasing the West Division's monthly advertising by $28,000 based on the belief that it would increase that division's sales by 13%. 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.) increase by Net operating income will