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 CompanyTorontoVancouverSales$1,000,000100.0%$160,000100%$840,000100%Variable expenses 460,00046.00 40,00025 420,00050 Contribution margin 540,00054.00 120,00075 420,00050 Traceable fixed expenses 193,20019.32 67,20042 126,00015 Office segment margin 346,80034.68 $52,80033%$294,00035%Common fixed expenses not traceable to offices 210,00021.00 Operating income$136,80013.68%

Required: 1. By how much would the companys operating income increase if Vancouver increased its sales by $91,000 per year? Assume no change in cost behaviour patterns.

2-a. Refer to the original data. Assume that sales in Toronto increase by $50,000 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.)

2-b. This part of the question is not part of your Connect assignment.