Question

i cannot find common fixed expenses not tracable to divions or the incremental operating income

Chapter 5 HW Wingate Company, A Wholesale Distrib Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as shown by its mos recent monthly contribution format income statement, which follows: $ Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) 1,682,000 678,700 1,003,300 1,104,000 (100,700) $ In an effort to isolate the problem, the president has asked for an income statement segmented by division. Accordingly, the Accountin Department has developed the following information: Sales Variable expenses as a percentage of sales Traceable fixed expenses $ Division Central $ 700,000 27 $ 338,000 East $ 422,000 55 $ 258,000 West 560,000 46 192,000 % % % $ Required: 1. Prepare a contribution format income statement segmented by divisions, as desired by the president. Sales Variable expenses Contribution margin Total Company $ 1,682,000 678,700 1,003,300 788,000 215,300 East $ 422,000 232,100 189,900 258,000 $ (68,100) Division Central $ 700,000 189,000 511,000 338,000 $ 173,000 West $ 560,000 257,600 302,400 192,000 $ 110,400 Traceable fixed expenses Divisional segment margin Common fixed expenses not traceable to divisions Net operating loss | $ 215,300 2-a. As a result of a marketing study, the president believes that sales in the West Division could be increased by 11% if monthly advertising in that division were increased by $23,000. Calculate the incremental net operating income. Incremental net operating income

Answer 1

1
		Division
	Total Company	East	Central	West
Sales	1682000	422000	700000	560000
Variable expenses	678700	232100	189000	257600
Contribution margin	1003300	189900	511000	302400
Traceable fixed expenses	788000	258000	338000	192000
Divisional segment margin	215300	(68100)	173000	110400
Common fixed expenses not traceable to divisions	316000
Net operating loss	(100700)
2
Incremental West Division sales	61600	=560000*11%
X Contribution margin ratio	54%	=1-46%
Incremental contribution margin	33264
Less incremental advertising expense	23000
Incremental Net operating income	10264
Workings:
Total fixed expenses	1104000
Less: Traceable fixed expenses	788000
Common fixed expenses not traceable to divisions	316000