Segmented Income Statement L07—4
Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as shown by its most recentmonthly contribution format income statement:
In an effort to resolve the problem, the company would like to prepare an income statement segmented by division. Accordingly, theAccounting Department has developed the following information:
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 $1 5:000 based on the belief that it wouldincrease that division’s sales by 20%. Assuming these estimates are accurate, how much would the Company’s net operating incomeincrease (decrease) if the proposal is implemented?
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