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 $ 1,546,000 559,260 Contribution margin Fixed expenses 986,740 1,085,000 Net operating income (loss) $ (98,260) 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 $376,000 $660,000 $510,000 East West Sales Variable expenses as a percentage of sales Traceable fixed expenses 51% 24% 41% $253,000 $322,000 $191,000 Required 1. Prepare a contribution format income statement segmented by divisions, as desired by the president. Division Total Company East Central West

Explanation / Answer

2-a:

2-b Yes

Total East Central West Sales 15,46,000        3,76,000        6,60,000        5,10,000 variable expeses % 51% 24% 41% variable expeses    5,59,260        1,91,760        1,58,400        2,09,100 Contribution    9,86,740        1,84,240        5,01,600        3,00,900 Traceble fixed expense    7,66,000        2,53,000        3,22,000        1,91,000 Division profit    2,20,740          -68,760        1,79,600        1,09,900 Non traceble fixed expenses    3,19,000 Net operating income      -98,260

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