Question: need traceable fixed expenses for all 4 and common fixed expenses Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some

 need traceable fixed expenses for all 4 and common fixed expenses
need traceable fixed expenses for all 4 and common fixed expenses
Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses

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 incone (loss) $ 1,628,000 627, 140 1,800, 860 1,101,000 $ (100,140) 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 East Central West Sales $398,000 $690,000 $540,000 Variable expenses as a percentage of sales 434 344 411 Traceable fixed expenses $285,000 $329,800 $209,000 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 $21,000 based on the belief that it would increase thot division's sales by 19%. 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. Prepare a contribution format income statement segmented by divisions. Sales Variable expenses Contribution margin Traceable fixed expenses Divisional segment margin Common fixed expenses not traceable to divisions Net operating loss Division Total Company East Central West $ 1,628,000 $ 398,000 $ 690,000 $540,000 627,140 171,140 234,600 221,400 1,000,860 226,860 455,400 318,600 790,000 268,000 321,000 201,000 210,860 $ (41,140) $ 134,400 $ 117,600 271,000 $ (60,140) Req2A >

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!