60.1K

Verified Solution

Link Copied!

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 Orice segment margin Common fixed expenses not traceable to offices Operating income Office Total Company Toronto Vancouver $840,000 100.00 $140,000 1001 $700,000 1000 378,000 45.00 28,000 20 350,00050 462,000 55.00 112,000 80 350,000 50 180,600 21.50 75,600 54 105,000 25 281,400 33.50 $ 36,400 261 $245,000 350 210.000 25.00 $ 71.400 0.500 Required: 1. By how much would the company's operating Income Increase if Vancouver increased its sales by $79,000 per year? Assume no change in cost behaviour patterns Increion in operating income 2.a. Refer to the original data. Assume that sales in Toronto increase by $160,000 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.) 2-a. Refer to the original data. Assume that sales in Toronto increase by $160,000 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 5% Amount 2-b. This part of the question is not part of your Connect assignment

Answer & Explanation Solved by verified expert

See Answer