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 $ 1,604,000
Variable expenses 663,400
Contribution margin 940,600
Fixed expenses 1,035,000
Net operating income (loss) $ (94,400)
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 East Central West
Sales $ 394,000 $ 630,000 $ 580,000
Variable expenses as a percentage of sales 50 % 28 % 50 %
Traceable fixed expenses $ 278,000 $ 333,000 $ 210,000
Required:
1. Prepare a contribution format income statement segmented by divisions, as desired by the president.