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Solve the following blanks: Middleton Associates is a consulting firm that specializes in information systems for construction and landscaping companies. The firm has two offices-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: Toronto Total Company 1,000,000 100.00% Office Vancouver 100% $ 820,000 100% 30 492,000 60 Sales $ $ 180,000 54,000 Variable expenses 546,000 54.60 Contribution margin Traceable fixed expenses 454,000 172,200 45.40 17.22 126,000 73,800 70 41 328,000 98,400 40 12 Office segment margin 281,800 28.18 $ 52,200 29% $ 229,600 28% Common fixed expenses not traceable to offices 102,500 10.25 Operating income $ 179, 300 17.93% Required: 1. By how much would the company's operating income increase if Vancouver increased its sales by $90,000 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 $25,000 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 %Step by Step Solution
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