Answer:
Wingate Company
1. Contribution Format
Segmented Income Statement
For the most recent month
East Central West Total
Sales $408,000 $650,000 $580,000 $1,638,000
Variable expenses as a
percentage of sales 208,080 227,500 243,600 679,180
Contribution margin $199,920 $422,500 $336,400 $958,820
Traceable fixed expenses $280,000 $333,000 $204,000 $817,000
Non-traceable fixed expenses 238,000
Net income ($80,080) $89,500 $132,400 ($96,180)
2. The company's net operating loss will decrease by $28,824.
Explanation:
a) Data and Calculations:
WINGATE COMPANY
Income Statement for the most recent month
Sales $1,638,000
Variable expenses 679,180
Contribution margin 958,820
Fixed expenses 1,055,000
Net operating income (loss) $(96,180)
Division
East Central West Total
Sales $408,000 $650,000 $580,000 $1,638,000
Variable expenses as a
percentage of sales 51% 35% 42%
Traceable fixed expenses $280,000 $333,000 $204,000 $817,000
Non-traceable fixed expenses 238,000
West Division:
Traceable fixed costs = $229,000 ($204,000 + $25,000)
Sales revenue = $672,800 ($580,000 * 1.16)
Variable expenses = $282,576 ($672,800 *42%)
1. Contribution Format
Segmented Income Statement
For the most recent month
East Central West Total
Sales $408,000 $650,000 $580,000 $1,638,000
Variable expenses as a
percentage of sales 208,080 227,500 243,600 679,180
Contribution margin $199,920 $422,500 $336,400 $958,820
Traceable fixed expenses $280,000 $333,000 $204,000 $817,000
Non-traceable fixed expenses 238,000
Net income ($80,080) $89,500 $132,400 ($96,180)
2. Contribution Format
Segmented Income Statement
For the most recent month
East Central West Total
Sales $408,000 $650,000 $672,800 $1,730,800
Variable expenses as a
percentage of sales 208,080 227,500 282,576 718,156
Contribution margin $199,920 $422,500 $390,224 $1,012,644
Traceable fixed expenses $280,000 $333,000 $229,000 $842,000
Non-traceable fixed expenses 238,000
Net income ($80,080) $89,500 $161,224 ($67,356)
Decrease in net operating loss = $28,824 ($96,180 - $67,356)
