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Exercise 6-11 (Algo) Segmented Income Statement [LO6-4] Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses as shown by its most 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 wants to prepare an income statement segmented by division. Accordingly, the Accounting Department provided the following information: Sales Variable expenses as a percentage of sales Traceable fixed expenses. $ 1,601,000 649,870 951,130 1,046,000 $ (94,870) Req 11 Req 2A East $ 391,000 $ 269,000 Req 28 47% Complete this question by entering your answers in the tabs below. Division Central $630,000 Required: 1. Prepare a contribution format income statement segmented by divisions. 2-a. The Marketing Department believes increasing the West Division's monthly advertising by $29,000 will increase that division's sales by 12%. 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? 39% $ 326,000 < Prev West $ 580,000 38% $ 206,000 The Marketing Department believes increasing the West Division's monthly advertising by $29,000 will increase that division's sales by 12%. Assuming these estimates are accurate, how much would the company's net operating income increase. (decrease) if the proposal is implemented? Note: Do not round intermediate calculations. 4 of 4 Next

Exercise 6-11 (Algo) Segmented Income Statement [LO6-4] Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses as shown by its most 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 wants to prepare an income statement segmented by division. Accordingly, the Accounting Department provided the following information: Sales Variable expenses as a percentage of sales Traceable fixed expenses. $ 1,601,000 649,870 951,130 1,046,000 $ (94,870) Req 11 Req 2A East $ 391,000 $ 269,000 Req 28 47% Complete this question by entering your answers in the tabs below. Division Central $630,000 Required: 1. Prepare a contribution format income statement segmented by divisions. 2-a. The Marketing Department believes increasing the West Division's monthly advertising by $29,000 will increase that division's sales by 12%. 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? 39% $ 326,000 < Prev West $ 580,000 38% $ 206,000 The Marketing Department believes increasing the West Division's monthly advertising by $29,000 will increase that division's sales by 12%. Assuming these estimates are accurate, how much would the company's net operating income increase. (decrease) if the proposal is implemented? Note: Do not round intermediate calculations. 4 of 4 Next

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Exercise 6-11 (Algo) Segmented Income Statement [LO6-4] Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses as shown by its most 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 wants to prepare an income statement segmented by division. Accordingly, the Accounting Department provided the following information: Sales Variable expenses as a percentage of sales Traceable fixed expenses $ 1,601,000 649,870 951,130 1,046,000 $ (94,870) East $ 391,000 47% $ 269,000 Req 1 Complete this question by entering your answers in the tabs below. Req 2A Division Central $630,000 39% $ 326,000 Required: 1. Prepare a contribution format income statement segmented by divisions. 2-a. The Marketing Department believes increasing the West Division's monthly advertising by $29,000 will increase that division's sales by 12%. 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? Reg 28 The Marketing Department believes increasing the West Division's monthly advertising by $29,000 will increase that division's sales by 12%. Assuming these estimates are accurate, how much would the company's net operating income increase (decrease) if the proposal is implemented? Note: Do not round intermediate calculations. < Prev West $ 580,000 $ 206,000 4 of 4 38% Next
Transcribed Image Text:Exercise 6-11 (Algo) Segmented Income Statement [LO6-4] Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses as shown by its most 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 wants to prepare an income statement segmented by division. Accordingly, the Accounting Department provided the following information: Sales Variable expenses as a percentage of sales Traceable fixed expenses $ 1,601,000 649,870 951,130 1,046,000 $ (94,870) East $ 391,000 47% $ 269,000 Req 1 Complete this question by entering your answers in the tabs below. Req 2A Division Central $630,000 39% $ 326,000 Required: 1. Prepare a contribution format income statement segmented by divisions. 2-a. The Marketing Department believes increasing the West Division's monthly advertising by $29,000 will increase that division's sales by 12%. 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? Reg 28 The Marketing Department believes increasing the West Division's monthly advertising by $29,000 will increase that division's sales by 12%. Assuming these estimates are accurate, how much would the company's net operating income increase (decrease) if the proposal is implemented? Note: Do not round intermediate calculations. < Prev West $ 580,000 $ 206,000 4 of 4 38% Next
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