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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 in Vancouver. The firm classifies the direct costs of consulting jobs as variable costs. A segmented contribution format income statement for the companys most recent year is given below:

					Office
	Total Company				Toronto				Vancouver
Sales	$	1,000,000	100.00	%	$	300,000	100	%	$	700,000	100	%
Variable expenses		490,000	49.00			105,000	35			385,000	55
Contribution margin		510,000	51.00			195,000	65			315,000	45
Traceable fixed expenses		280,000	28.00			168,000	56			112,000	16
Office segment margin		230,000	23.00		$	27,000	9	%	$	203,000	29	%
Common fixed expenses not traceable to offices		84,000	8.40
Operating income	$	146,000	14.60	%

Required: 1. By how much would the companys operating income increase if Vancouver increased its sales by $80,000 per year? Assume no change in cost behaviour patterns.

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.)

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