1. Prepare a contribution format income statement segmented by divisions.2-a. The Marketing Department believes increasing the West Division's monthly advertising by $24,000 will increase that division'ssales by 11%. Assuming these estimates are accurate, how much would the company's net operating income increase (decrease) if theproposal is implemented?2-b. Would you recommend the increased advertising?Complete this question by entering your answers in the tabs below.Req 1Req 2AReq 2BPrepare a contribution format income statement segmented by divisions.< Req 1Total CompanyEastReq 2A >DivisionCentralWest Exercise 6-11 (Algo) Segmented Income Statement [LO6-4]Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses as shown by its most recent monthlycontribution format income statement:SalesVariable expensesContribution marginFixed expensesNet operating income (loss)$ 1,535,000631,600903,400994,00$ (90,600)In an effort to resolve the problem, the company wants to prepare an income statement segmented by division. Accordingly, theAccounting Department provided the following information:SalesVariable expenses as a percentage of salesTraceable fixed expensesEast$ 375,000$ 287,00056%DivisionCentral$ 660,00026%$ 336,000West$ 500,00050%$ 205,000Required:1. Prepare a contribution format income statement segmented by divisions.2-a. The Marketing Department believes increasing the West Division's monthly advertising by $24,000 will increase that division'ssales by 11%. Assuming these estimates are accurate, how much would the company's net operating income increase (decrease) if theproposal is implemented?2-b. Would you recommend the increased advertising?

The contribution margin is calculated as the difference between the sales and variable costs. The…

1. Prepare a contribution format income statement segmented by divisions. 2-a. The Marketing Department believes increasing the West Division's monthly advertising by $24,000 will increase that division's sales by 11%. 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

1. Prepare a contribution format income statement segmented by divisions. 2-a. The Marketing Department believes increasing the West Division's monthly advertising by $24,000 will increase that division's sales by 11%. 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

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter21: Variable Costing For Management analysis

Section: Chapter Questions

Problem 15E

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