Answered step by step
Verified Expert Solution
Question
1 Approved Answer
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
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. Total Company $ 911, 080 100.00% 452,750 49.70 Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Toronto $ 161,000 40,250 Office Vancouver 100% $ 750,000 25 412,500 100% 55 458,250 172, 110 50.30 18.89 120,750 82,110 75 51 337,500 90,000 45 286, 140 31.41 12 $ 38,640 24% $ 247,500 33% Common fixed expenses not traceable to offices Operating income 180,000 19.76 A 106, 140 11.65% Required: 1. By how much would the company's operating income increase if Vancouver increased its sales by $84.000 per year? Assume no change in cost behaviour patterns. Increase in operating income CI 2-a. Refer to the original data. Assume that sales in Toronto increase by $100,000 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.) Total Company Amount Toronto Amount Segments Vancouver % Amount Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to segments 0 0.00 0 0.00 0,00 $ 0.00 $ 0.00 $ I I 0 0.00 0 0.00 2-b. Not available in Conn
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started