Wingate Compa recent monthly Sales Variable exp Contribution Fixer
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![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
Variable expenses
Contribution margin
Traceable fixed expenses
Divisional segment margin
Common fixed expenses not traceable to divisions
Net operating loss
♥
Reg!
Division
East
Central
$ 440,000
$ 620,000
228,800 223,200
Total
Company
$ 1,600,000
700,400
899,600
211,200 396,800
280,000 320,000
795,000
104,600 $(68,800) $ 76,800
195,000
(90,400)
$
Req 2A >
West
$540,000
248,400
291,600
195,000
$ 96,600](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fbe92dd9c-8b45-4b84-bb7e-8ac321c450aa%2Fe097043b-08d0-4afd-ac9f-0e8257ed91c8%2Fzhcne8i_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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
Variable expenses
Contribution margin
Traceable fixed expenses
Divisional segment margin
Common fixed expenses not traceable to divisions
Net operating loss
♥
Reg!
Division
East
Central
$ 440,000
$ 620,000
228,800 223,200
Total
Company
$ 1,600,000
700,400
899,600
211,200 396,800
280,000 320,000
795,000
104,600 $(68,800) $ 76,800
195,000
(90,400)
$
Req 2A >
West
$540,000
248,400
291,600
195,000
$ 96,600
![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)
$ 1,600,000
700,400
899,600
990,000
$ (90,400)
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
Variable expenses as a percentage of sales.
Traceable fixed expenses
East
$ 440,000
$ 280,000
52%
Division
Central
$ 620,000
$ 320,000
36%
West
$ 540,000
46%
$ 195,000
Required:
1. Prepare a contribution format income statement segmented by divisions.
2-a. The Marketing Department has proposed increasing the West Division's monthly advertising by $21,000 based on the belief that it
would increase that division's sales by 15%. 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?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fbe92dd9c-8b45-4b84-bb7e-8ac321c450aa%2Fe097043b-08d0-4afd-ac9f-0e8257ed91c8%2Fpv9edpe_processed.jpeg&w=3840&q=75)
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
Net operating income (loss)
$ 1,600,000
700,400
899,600
990,000
$ (90,400)
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
Variable expenses as a percentage of sales.
Traceable fixed expenses
East
$ 440,000
$ 280,000
52%
Division
Central
$ 620,000
$ 320,000
36%
West
$ 540,000
46%
$ 195,000
Required:
1. Prepare a contribution format income statement segmented by divisions.
2-a. The Marketing Department has proposed increasing the West Division's monthly advertising by $21,000 based on the belief that it
would increase that division's sales by 15%. 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?
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 2 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![Horngren's Cost Accounting: A Managerial Emphasis…](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
![Intermediate Accounting](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
![Financial and Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education