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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	$ 1,680,000
Variable expenses	759,200
Contribution margin	920,800
Fixed expenses	1,013,000
Net operating income (loss)	$ (92,200)

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
Sales	$ 450,000	$ 640,000	$ 590,000
Variable expenses as a percentage of sales	49%	39%	49%
Traceable fixed expenses	$ 279,000	$ 336,000	$ 191,000

Required:

1a. Prepare a contribution format income statement segmented by divisions.

	Total company	East	Central	West
Sales	?#	?#	?#	?#
?#	?#	?#	?#	?#
Contribution margin	0	0	0	0
?#	?#	?#	?#	?#
Divisional segment margin	0	$0	$0	$0
?#	?#
Net operating loss	$0

1b. The Marketing Department has proposed increasing the West Division's monthly advertising by $24,000 based on the belief that it would increase that division's sales by 14%. Assuming these estimates are accurate, how much would the company's net operating income increase (decrease) if the proposal is implemented?

Net operating income will

increase

by

?#

1c. Would you recommend the increased advertising?

YES

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