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 $ $800,000100\mathrm{.}0\%$ $ $120,000100\%$ $ $680,000100\%$

Variable expenses $444,00055\mathrm{.}5036,00030408,00060$

Contribution margin $356,00044\mathrm{.}5084,00070272,00040$

Traceable fixed expenses $129,20016\mathrm{.}1561,2005168,00010$

Office segment margin $226,80028\mathrm{.}35$ $ $22,80019\%$ $ $204,00030\%$

Common fixed expenses

not traceable to offices $102,00012\mathrm{.}75$

Operating income $ $124,80015\mathrm{.}60\%$

Required:

$1.$ By how much would the company$$s operating income increase if Vancouver increased its sales by $$77,000$ per year? Assume no change in cost behaviour patterns.

$2-$a$.$ Refer to the original data. Assume that sales in Toronto increase by $$50,000$ 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.$)$