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	$	800,000	100.0	%	$	160,000	100	%	$	640,000	100	%
Variable expenses		472,000	59.00			56,000	35			416,000	65
Contribution margin		328,000	41.00			104,000	65			224,000	35
Traceable fixed expenses		187,200	23.40			91,200	57			96,000	15
Office segment margin		140,800	17.60		$	12,800	8	%	$	128,000	20	%
Common fixed expenses not traceable to offices		120,000	15.00
Operating income	$	20,800	2.60	%

Required: 1. By how much would the companys operating income increase if Vancouver increased its sales by $73,000 per year? Assume no change in cost behaviour patterns.

2-a. Refer to the original data. Assume that sales in Toronto increase by $160,000 next year and that sales in Vancouver remain unchanged. Assume no change in fixed costs. Prepare a new segmented income statement for the company

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