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

Total Company Toronto Vancouver

Sales $ $1,000,000100\mathrm{.}0\%$ $ $180,000100\%$ $ $820,000100\%$

Variable expenses $546,00054\mathrm{.}6054,00030492,00060$

Contribution margin $454,00045\mathrm{.}40126,00070328,00040$

Traceable fixed expenses $172,20017\mathrm{.}2273,8004198,40012$

Office segment margin $281,80028\mathrm{.}18$ $ $52,20029\%$ $ $229,60028\%$

Common fixed expenses

not traceable to offices $102,50010\mathrm{.}25$

Operating income $ $179,30017\mathrm{.}93\%$

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.

$2-$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.$)$