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 $1,629,000 596,360 Contribution margin Fixed expenses 1,032,640 1,136,000 Net operating income (loss) S (103,360) 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 $429,000 $680,000 $520,000 $271,000 $329,000 $201,000 ast ntral est Sales Variable expenses as a percentage of sales Traceable fixed expenses 44% 47% Required 1. Prepare a contribution format income statement segmented by divisions, as desired by the president. Division Total CompanyEast Central West

Explanation / Answer

Total East Central West Sales 1629000 429000 680000 520000 Variable expenses 596360 188760 163200 244400 Contribution margin 1032640 240240 516800 275600 Traceable fixed expenses 801000 271000 329000 201000 Divisional segment margin 231640 -30760 187800 74600 Common fixed expenses not traceable to divisions 335000 Net operating loss -103360

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