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 $1,000,000 100.0% $280,000 100% $720,000 100% Variable expenses 516,000 51.60 84,000 30 432,000 60 Contribution margin 484,000 48.40 196,000 70 288,000 40 Traceable fixed expenses 259,200 25.92 151,200 54 108,000 15 Office segment margin 224,800 22.48 $ 44.300 15% 5130:000 25% Common fixed expenses not traceable to offices 81,000 8.10 Operating income $ 143,800 14.38% Increase in operating incomeSegments Total Company Toronto Vancouver Amount % Amount % Amount %