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ch11 Middleton Associates is a consulting firm that specializes in information systems for construction and landscaping companies. The firm has two offices-one in Toronto and
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Middleton Associates is a consulting firm that specializes in information systems for construction and landscaping companies. The firm has two offices-one in Toronto and one in Vancouver. The firm classifies the direct costs of consulting jobs as variable costs. A segmented contribution format income statement for the company's most recent year is given below: Office Toronto Total Company 1,000,000 Vancouver 820,000 100% 100.00% $180,000 100% $ Sales 492,000 60 Variable expenses 546,000 54.60 54,000 30 328,000 98,400 12 229,600 28% 126,000 Contribution margin Traceable fixed expenses 454,000 45.40 70 40 172,200 17.22 73,800 41 Office segment margin 281,800 28.18 $52,200 29% $ Common fixed expenses noft traceable to offices 102,500 10.25 Operating income $179,300 17.93% Required 1 By how much would the company's operating income increase if Vancouver increased its sales by $90,000 per year? Assume no change in cost behaviour patterns Net operating income 2-a. Refer to the original data. Assume that sales in Toronto increase by $25,000 next year and that sales in Vancouver remain unchanged. Assume no change in fixed costs. Prepare a new segmented income statement for the company. (Round your percentage answers to 2 decimal places.) Segments Total Company Toronto Vancouver Amount Amount Amount 0.00 0.00 0.00 00.00 0 .00 S 0 0.00 0.00Step by Step Solution
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