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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

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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: 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 $1,000,000 100.01 $300,000 1001 $700,000 100 490,000 49.00 105,000 35 385,000 55 $10,000 51.00 195,000 65 315,000 45 280,000 28.00 168,000 56 112,000 16 230,000 23.00 $ 27.000 91 $203,000 298 84.000 8.40 146,000 14.604 Required: 1. By how much would the company's operating income increase if Vancouver increased its sales by $80,000 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 $120,000 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.) Total Company Amount Toronto Amount Segments Vancouver % Amount %

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