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 $ 1,610,000 551,400 Net operating income (loss) 1,058,600 1,164,000 $ (105,400) 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: Sales East $410,000 Division Central $ 670,000 West $530,000 Variable expenses as a percentage of sales Traceable fixed expenses 52% 22% 36% $ 278,000 $ 326,000 $ 200,000 Required: 1. Prepare a contribution format Income statement segmented by divisions. 2-8. The Marketing Department has proposed increasing the West Division's monthly advertising by $27,000 based on the belief that it would increase that division's sales by 13%. 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? Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 28 Prepare a contribution format income statement segmented by divisions. Sales Division Total Company East Central West 0 0 0 0 Variable expenses Contribution margin Traceable fixed expenses Divisional segment margin Common fixed expenses not traceable to divisions Net operating income $ 0 0 $ 0 $ 0 $ 0 The Marketing Department has proposed increasing the West Division's monthly advertising by $27,000 based on the belief that it would increase that division's sales by 13%. Assuming these estimates are accurate, how much would the company's net operating income increase (decrease) if the proposal is implemented? (Do not round intermediate calculations.) Net operating income will by
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 $ 1,610,000 551,400 Net operating income (loss) 1,058,600 1,164,000 $ (105,400) 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: Sales East $410,000 Division Central $ 670,000 West $530,000 Variable expenses as a percentage of sales Traceable fixed expenses 52% 22% 36% $ 278,000 $ 326,000 $ 200,000 Required: 1. Prepare a contribution format Income statement segmented by divisions. 2-8. The Marketing Department has proposed increasing the West Division's monthly advertising by $27,000 based on the belief that it would increase that division's sales by 13%. 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? Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 28 Prepare a contribution format income statement segmented by divisions. Sales Division Total Company East Central West 0 0 0 0 Variable expenses Contribution margin Traceable fixed expenses Divisional segment margin Common fixed expenses not traceable to divisions Net operating income $ 0 0 $ 0 $ 0 $ 0 The Marketing Department has proposed increasing the West Division's monthly advertising by $27,000 based on the belief that it would increase that division's sales by 13%. Assuming these estimates are accurate, how much would the company's net operating income increase (decrease) if the proposal is implemented? (Do not round intermediate calculations.) Net operating income will by
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text: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
$ 1,610,000
551,400
Net operating income (loss)
1,058,600
1,164,000
$ (105,400)
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:
Sales
East
$410,000
Division
Central
$ 670,000
West
$530,000
Variable expenses as a percentage of sales
Traceable fixed expenses
52%
22%
36%
$ 278,000
$ 326,000
$ 200,000
Required:
1. Prepare a contribution format Income statement segmented by divisions.
2-8. The Marketing Department has proposed increasing the West Division's monthly advertising by $27,000 based on the belief that it
would increase that division's sales by 13%. 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?
Complete this question by entering your answers in the tabs below.
Req 1
Req 2A
Req 28
Prepare a contribution format income statement segmented by divisions.
Sales
Division
Total Company
East
Central
West
0
0
0
0
Variable expenses
Contribution margin
Traceable fixed expenses
Divisional segment margin
Common fixed expenses not traceable to divisions
Net operating income
$
0
0
$
0
$
0
$
0
The Marketing Department has proposed increasing the West Division's monthly advertising by $27,000 based on the belief
that it would increase that division's sales by 13%. Assuming these estimates are accurate, how much would the company's
net operating income increase (decrease) if the proposal is implemented? (Do not round intermediate calculations.)
Net operating income will
by
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