Middleton Associates is a consulting firm that specializes in information systems for construction and landscaping companies. The firm has two officesone 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 companys most recent year is given below:

					Office
	Total Company				Toronto				Vancouver
Sales	$	880,000	100.00	%	$	220,000	100	%	$	660,000	100	%
Variable expenses		374,000	42.50			44,000	20			330,000	50
Contribution margin		506,000	57.50			176,000	80			330,000	50
Traceable fixed expenses		237,600	27.00			118,800	54			118,800	18
Office segment margin		268,400	30.50		$	57,200	26	%	$	211,200	32	%
Common fixed expenses not traceable to offices		99,000	11.25
Operating income	$	169,400	19.25	%

Required:

1.	By how much would the companys operating income increase if Vancouver increased its sales by $75,000 per year? Assume no change in cost behaviour patterns.

2-a.	Refer to the original data. Assume that sales in Toronto increase by $110,000 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.)

Net operating income Segments Total Company Toronto Vancouver Amount % Amount % Amount %