EXERCISE 4-11 Segmented Income Statement L04-4 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).. Sales Variable expenses as a percentage of sales Traceable fixed expenses 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: East $1,000,000 390,000 $250,000 610,000 625,000 $ (15,000) Division Central $400,000 52% 30% $160,000 $200,000 West $350,000 40% $175,000 Required: 1. Prepare a contribution format income statement segmented by divisions. 2. The Marketing Department has proposed increasing the West Division's monthly advertising by $15,000 based on the belief that it would increase that division's sales by 20%. Assuming these estimates are accurate, how much would the company's net operating income increase (decrease) if the proposal is implemented?

EXERCISE 4-11 Segmented Income Statement L04-4 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).. Sales Variable expenses as a percentage of sales Traceable fixed expenses 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: East $1,000,000 390,000 $250,000 610,000 625,000 $ (15,000) Division Central $400,000 52% 30% $160,000 $200,000 West $350,000 40% $175,000 Required: 1. Prepare a contribution format income statement segmented by divisions. 2. The Marketing Department has proposed increasing the West Division's monthly advertising by $15,000 based on the belief that it would increase that division's sales by 20%. Assuming these estimates are accurate, how much would the company's net operating income increase (decrease) if the proposal is implemented?

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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