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Cane company has two offices. A segmented contribution format income statement for the company's most recent month is as follows: Office Total Company Brandon Winnipeg
Cane company has two offices. A segmented contribution format income statement for the company's most recent month is as follows: Office Total Company Brandon Winnipeg Sales $90,000 100% $40,000 100% $50,000 100% Variable expenses 44.000 489 24.000 60 20.000 40 Contribution margin 46,000 51.1 16,000 40 30,000 60 Traceable fixed expenses 27,400 30.4 10.400 26 17 000 34 Office segment margin 18,600 20.7 $5,600 14 $13,000 26 Common fixed expenses 9000 Operating income $9,600 Required: 1. Assuming no change in cost behaviours by how much would the company's operating income increase it Brandon increased its sales by $3.000 (2 marks) 2. A new owner would like to see the common fixed expenses allocated to each office in proportion to their sales The owner wants all segments to help cover all of the costs. Do you agree or disagree with the owner? Provide two reasons to support your response
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