Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as...
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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 $ 1,583,000 723,870 Net operating income (loss) 859,130 945,000 $ (85,870) 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 East $ 403,000 Division Central $ 630,000 West $ 550,000 Variable expenses as a percentage of sales Traceable fixed expenses 59% 37% 46% $ 255,000 $ 339,000 $ 193,000 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 $23,000 based on the belief that it would increase that division's sales by 17 %. 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 Division Central West Req 1 Req 2A > Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B The Marketing Department has proposed increasing the West Division's monthly advertising by $23,000 based on the belief that it would increase that division's sales by 17%. Assuming these estimates are accurate, how much would the company's net operating income increase (decrease) if the proposal is implemented? Note: Do not round intermediate calculations. Net operating income will by Show less A Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Would you recommend the increased advertising? Would you recommend the increased advertising? < Req 2A Req 28 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 $ 1,583,000 723,870 Net operating income (loss) 859,130 945,000 $ (85,870) 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 East $ 403,000 Division Central $ 630,000 West $ 550,000 Variable expenses as a percentage of sales Traceable fixed expenses 59% 37% 46% $ 255,000 $ 339,000 $ 193,000 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 $23,000 based on the belief that it would increase that division's sales by 17 %. 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 Division Central West Req 1 Req 2A > Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B The Marketing Department has proposed increasing the West Division's monthly advertising by $23,000 based on the belief that it would increase that division's sales by 17%. Assuming these estimates are accurate, how much would the company's net operating income increase (decrease) if the proposal is implemented? Note: Do not round intermediate calculations. Net operating income will by Show less A Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Would you recommend the increased advertising? Would you recommend the increased advertising? < Req 2A Req 28
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Related Book For
Managerial Accounting
ISBN: 9781260247787
17th Edition
Authors: Ray Garrison, Eric Noreen, Peter Brewer
Posted Date:
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