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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: Office Total Company Toronto Vancouver $800,000 100.0% $120,000 100% $680,000 100% 444,000 55.50 36,000 30 408,000 356,000 44.50 84,000 272,000 40 129,200 16.15 61,200 51 68,000 10 226,800 28.35 $ 22,800 19% $204,000 30% 60 Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Operating income 70 102,000 12.75 $124,800 15.60% 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. Increase in operating income 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.) Segments Total Company Toronto Vancouver Amount % Amount % Amount %
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