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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
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 fo 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 Operating income Office Total Company Toronto Vancouver $911,000100.0% $161,000100% $750,000 100% 452,75049.70 40, 250 25 412,500 55 458, 25050.30 120, 750 75 337,500 45 172,11018.89 82,110 51 90,000 12 286,14031.41 $ 38,640 24% $247,500 33% 180,00019.76 $106,14011.65% Required: 1. By how much would the company's operating income increase if Vancouver increased its sales by $84,000 per year? Assume no change in cost behaviour patterns. Increase in operating income 2-a. Refer to the original data. Assume that sales in Toronto increase by $100,000 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.) Segments Total Company Toronto Vancouver Amount % Amount % Amount % 2-b. This part of the question is not part of your Connect assignment
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