Business, 01.03.2021 21:30 dontworry48

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 $1,630,000
Variable expenses 692,400
Contribution margin 937,600
Fixed expenses 1,031,000
Net operating income (loss) $(93,400)

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 $410,000 $640,000 $580,000
Variable expenses as a percentage of sales 54% 31% 47%
Traceable fixed expenses $261,000 $326,000 $210,000

Required:
a. Prepare a contribution format income statement segmented by divisions, as desired by the president.
b. As a result of a marketing study, the president believes that sales in the West Division could be increased by 20% if monthly advertising in that division were increased by $I5,000. Would you recommend the increased advertising?

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Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for s...

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