Sagar Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as shownby its most recent monthly contribution format income statementSalesVariable expensesContribution marginFixed expensesNet operating income (loss)$ 1,584,000524,1001,059,9001,166,000$ (106,100)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:SalesEast$ 414,000DivisionCentral$ 660,000West$ 510,000Variable expenses as a percentage of salesTraceable fixed expenses50%21%35%$ 288,000$ 333,000$ 194,000Required: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 $26,000 based on thebelief that it would increase that division's sales by 16%. Assuming these estimates are accurate, how much would thecompany'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 1Req 2AReq 2BPrepare a contribution format income statement segmented by divisions.DivisionTotal Company EastCentralWestReq 1Req 2A >

Contribution margin income statement displays contribution margin and net income. Segmented…

Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, JS SHOWI by its most recent monthly contribution format income statement Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) $ 1,584,000 524,100 1,059,900 1,166,000 $ (106,100) 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 $ 414,000 Variable expenses as a percentage of sales Traceable fixed expenses 50% Division Central $ 660,000 21% West $ 510,000 35% $ 288,000 $ 333,000 $194,000 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 $26,000 based on the belief that it would increase that division's sales by 16%. 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?

Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, JS SHOWI by its most recent monthly contribution format income statement Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) $ 1,584,000 524,100 1,059,900 1,166,000 $ (106,100) 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 $ 414,000 Variable expenses as a percentage of sales Traceable fixed expenses 50% Division Central $ 660,000 21% West $ 510,000 35% $ 288,000 $ 333,000 $194,000 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 $26,000 based on the belief that it would increase that division's sales by 16%. 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?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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