Req 1Req 2AReq 2BPrepare a contributlon format Income statement segmented by dlvislons.DivisionTotal CompanyEastCentralWestReq 1Req 2AReq 2BThe Marketing Department has proposed increasing the West Division's monthly advertising by $22,000 based on the beliefthat it would increase that division's sales by 13%. Assuming these estimates are accurate, how much would the company'snet operating income increase (decrease) if the proposal is implemented? (Do not round intermediate calculations.)Net operating income willbyReq 1Req 2AReq 2BWould you recommend the increased advertising?OYesNo Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as shown by its mostrecent monthly contribution format income statement:$ 1,480,000582,700SalesVariable expensesContribution marginFixed expenses897,300987,000Net operating income (loss)$(89,700)In an effort to resolve the problem, the company would like to prepare an income statement segmented by division. Accordingly, theAccounting Department has developed the following information:DivisionEastCentralWest$350,00051%Sales$630,000$500,00034%Variable expenses as a percentage of salesTraceable fixed expenses38%$277,000$340,000$191,000Required: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 $22,000 based on the belief thatit would increase that division's sales by 13%. Assuming these estimates are accurate, how much would the company's net operatingincome increase (decrease) if the proposal is implemented?2-b. Would you recommend the increased advertising?

Contribution margin income statement shows variable costs and fixed costs in such a manner so that…

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: $ 1,480,000 582,700 897,300 987,000 Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) $ (89,700) 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 $350,000 51% Sales $630,000 $500,000 Variable expenses as a percentage of sales Traceable fixed expenses 34% 38% $277,000 $340,000 $191,000 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 $22,000 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?

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: $ 1,480,000 582,700 897,300 987,000 Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) $ (89,700) 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 $350,000 51% Sales $630,000 $500,000 Variable expenses as a percentage of sales Traceable fixed expenses 34% 38% $277,000 $340,000 $191,000 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 $22,000 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?

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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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) $ 1,559,000 567,150 991,850 1,091,000 $ (99,150) 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 Variable expenses as a percentage of sales Traceable fixed expenses East $ 359,000 $ 291,000 45% Division Central $ 640,000 24% $ 329,000 West 560,000 45% $ 204,000 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 $22,000 based on the belief that it would increase that division's sales by 12%. Assuming these estimates are accurate, how much would…
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