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 | $ | 1,649,000 |
Variable expenses | 687,570 | |
Contribution margin | 961,430 | |
Fixed expenses | 1,058,000 | |
Net operating income (loss) | $ | (96,570) |
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:
Division |
|||||||||
East | Central | West | |||||||
Sales | $ | 449,000 | $ | 640,000 | $ | 560,000 | |||
Variable expenses as a percentage of sales | 53 | % | 30 | % | 46 | % | |||
Traceable fixed expenses | $ | 282,000 | $ | 330,000 | $ | 202,000 | |||
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 $25,000 based on the belief that it would increase that division's sales by 14%. 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?
In case of any Issues or doubts , Please comment below
Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as...
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 $ 1,689,000 Variable expenses 663,450 Contribution margin 1,025,550 Fixed expenses 1,128,000 Net operating income (loss) $ (102,450) 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: Division East Central West Sales $ 449,000 $...
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 $ 1,579,000 Variable expenses 691,900 Contribution margin 887,100 Fixed expenses 976,000 Net operating income (loss) $ (88,900) 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: Division East Central West Sales $ 449,000 $...
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 $ 1,556,000 Variable expenses 582,380 Contribution margin 973,620 Fixed expenses 1,071,000 Net operating income (loss) $ (97,380) 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: Division East Central West Sales $ 366,000 $...
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 incone (less) $ 1.783.000 577,918 1.125.90 1,238, cee $ (112,910) 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: West $590,000 Sales Variable expenses as a...
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) $1,000,000 390,000 610,000 625,000 $ (15,000) 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...
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 $ 1,672,000 Variable expenses 740,640 Contribution margin 931,360 Fixed expenses 1,024,000 Net operating income (loss) $ (92,640) 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: Division East Central West Sales $ 402,000 $...
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 $ 1,648,000 Variable expenses 671,840 Contribution margin 976,160 Fixed expenses 1,074,000 Net operating income (loss) $ (97,840) 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: Division East Central West Sales $ 398,000 $...
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 $ 1,594,000 Variable expenses 558,780 Contribution margin 1,035,220 Fixed expenses 1,139,000 Net operating income (loss) $ (103,780) 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: Division East Central West Sales $ 434,000 $...
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 $ 1,595,000 Variable expenses 665,750 Contribution margin 929,250 Fixed expenses 1,022,000 Net operating income (loss) $ (92,750) 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: Division East Central West Sales $ 415,000 $...
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) $ 1,609,000 671,450 937,550 1,031,000 $ (93,450) 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...