Wingate Company, a wholesale distributor of electronic equipment, has been exper

Question

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, which follows: Sales Variable expenses $1,604,000 636,820 Contribution margin Fixed expenses 967,180 1,064,000 Net operating income (loss) $ (96,820) In an effort to isolate the problem, the president has asked for an income statement segmented by division Accordingly, the Accounting Department has developed the following information: Division Central $394,000 $690,000 $520,000 East West Sales Variable expenses as a percentage of sales Traceable fixed expenses 58% 23% 48% $275,000 $321,000 $190,000 Required: 1. Prepare a contribution format income statement segmented by divisions, as desired by the president Total CompanyEast Central

Explanation / Answer

Total East Central West Sales 1604000 394000 690000 520000 Variable expenses 636820 228520 158700 249600 Contribution margin 967180 165480 531300 270400 Traceable fixed expenses 786000 275000 321000 190000 Divisional segment margin 181180 -109520 210300 80400 Common fixed expenses not traceable to divisions 278000 Net operating loss -96820 2a Incremental net operating income =(270400*20%)-21000= 33080 2b Yes

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.