Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as shown by its recent monthly contribution format income statement: Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) In an effort to resolve the problem, the company would like to prepare an income statement segmented by division. Accordingly, Accounting Department has developed the following information: Sales Variable expenses as a percentage of sales Traceable fixed expenses Req 1 $ 1,670,000 607,900 1,062,100 1,168,000 $ (105,900) Complete this question by entering your answers in the tabs below. Req 2A Req 2B East $ 430,000 49% $ 270,000 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 $27,000 based on the belief would 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? < Req 1 Prepare a contribution format income statement segmented by divisions. Total Company East Division Central $ 680,000 23% $ 325,000 Req 2A > West $ 560,000 $ 201,000 Division Central 43% West

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter5: Activity-based Costing And Management

Section: Chapter Questions

Problem 57P: Customers as a Cost Object Morrisom National Bank has requested an analysis of checking account...