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Middleton Associates is a consulting firm that specializes in information systems for construction and landscaping com The firm has two offices-one in Toronto and
Middleton Associates is a consulting firm that specializes in information systems for construction and landscaping com 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: Sales Variable expenses Contribution margin Traceable fixed expenses: Office segment margin Common fixed expenses not traceable to offices Office Total Company Toronto Vancouver 565,000 56.se 435,000 43.50 $1,000,000 100.0% $140,000 100% $860,000 100% 516,000 60 401 344,000 137,600 16 197,800 19.78 60,200 43 237,200 23.72 $ 30,800 22% $206,400 49,000 35 91,000 65 24% 107,see 10.75 $ 129,700 12.97% Operating income Required: 1. By how much would the company's operating income increate if Vancouver increased its sales by $92,000 per year? Assume no change in cost behaviour patterns. Increase in operating income
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