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 $ $ $
Variable expenses
Contribution margin
Traceable fixed expenses
Office segment margin $ $
Common fixed expenses
not traceable to offices
Operating income $
Required:
By how much would the companys operating income increase if Vancouver increased its sales by $ per year? Assume no change in cost behaviour patterns.
a Refer to the original data. Assume that sales in Toronto increase by $ 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 decimal places.
