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:
Sales $1,674,000
Variable expenses 588,000
Contribution margin 1,086,000
Fixed expenses 1,195,000
Net operating income (loss) $(109,000)
In an effort to resolve the problem, the company would like to prepare an income statement segmented by division. Accordingly, the Accounting Department has developed the following information:
Division
East Central West
Sales $384,000 $690,000 $600,000
Variable expenses as a percentage of sales 45% 28% 37%
Traceable fixed expenses $270,000 $326,000 $204,000
Required:
a. Prepare a contribution format income statement segmented by divisions, as desired by the president.
b. As a result of a marketing study, the president believes that sales in the West Division could be increased by 20% if monthly advertising in that division were increased by $15,000. Would you recommend the increased advertising?Required:
Answers: 3
Business, 21.06.2019 22:40, ipcmeaganlatham
wilson's has 10,000 shares of common stock outstanding at a market price of $35 a share. the firm also has a bond issue outstanding with a total face value of $250,000 which is selling for 102 percent of face value. the cost of equity is 11 percent while the preminustax cost of debt is 8 percent. the firm has a beta of 1.1 and a tax rate of 34 percent. what is wilson's weighted average cost of capital?
Answers: 3
Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for s...
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