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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 for the company's most recent year is given below: Sales Variable expenses Total Company $ 960,000 100.00% 528,000 55.00 Toronto $ 160,000 48,000 Office Vancouver 100% $ 800,000 100% 30 480,000 60 Contribution margin Traceable fixed expenses 432,000 172,800 45.00 18.00 112,000 92,800 70 58 320,000 80,000 40 10 Office segment margin 259,200 27.00 $ 19, 200 12% $ 240,000 30% Common fixed expenses not traceable to offices 120,000 12.50 Operating income $ 139,200 14.50% 2-a. Refer to the original data. Assume that sales in Toronto increase by $40,000 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.) X Answer is not complete. Segments Toronto Vancouver Amount Total Company Amount % $ 100.00 1,000,000 % Amount % Sales $ 800,000 100.00 Variable expenses 480,000 60.00 Contribution margin 100.00 0 0.00 320,000 40.00 1,000,000 172,800 $ 827,200 10.00 80,000 $ 240,000 100.00 $ O 0.00 30.00 Traceable fixed expenses Office segment margin Common fixed expenses not traceable to segments Operating income $ 827,200 100.00
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