Help Save & Exit 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 Office segment margin Common fixed expenses not traceable to offices Operating income Total Company Toronto Office Vancouver $1,100,000 100.0% $330,000 100% $770,000 100% 616,000 56.00 484,000 44.00 115,500 35 308,000 28.00 176,000 16.00 214,500 65 184,800 56 500,500 65 269,500 35 123,200 16 $ 29,700 9% $146,300 19% 110,000 10.00 A 66,000 6.00% Required: 1. By how much would the company's operating income increase if Vancouver increased its sales by $86,000 per year? Assume no change in cost behaviour patterns. Increase in operating income $ 30.100 Check my
Help Save & Exit 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 Office segment margin Common fixed expenses not traceable to offices Operating income Total Company Toronto Office Vancouver $1,100,000 100.0% $330,000 100% $770,000 100% 616,000 56.00 484,000 44.00 115,500 35 308,000 28.00 176,000 16.00 214,500 65 184,800 56 500,500 65 269,500 35 123,200 16 $ 29,700 9% $146,300 19% 110,000 10.00 A 66,000 6.00% Required: 1. By how much would the company's operating income increase if Vancouver increased its sales by $86,000 per year? Assume no change in cost behaviour patterns. Increase in operating income $ 30.100 Check my
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
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: \table[[\table[[Sales],[Variable expenses],[Contribution margin],[Traceable fixed expenses],[office segment margin],[Common fixed expenses],[not traceable to offices]],Total Company,office],[Toronto,Vancouver],[,1,100,000,100.0%,$330,000,100%,$770,000,100%
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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:
Sales
Variable expenses
Contribution margin
Traceable fixed expenses
Office segment margin
Common fixed expenses
not traceable to offices
Operating income
Total Company
Toronto
Office
Vancouver
$1,100,000 100.0% $330,000 100% $770,000 100%
616,000 56.00
484,000 44.00
115,500 35
308,000 28.00
176,000 16.00
214,500 65
184,800 56
500,500 65
269,500 35
123,200 16
$ 29,700 9% $146,300 19%
110,000 10.00
A
66,000 6.00%
Required:
1. By how much would the company's operating income increase if Vancouver increased its sales by $86,000 per year? Assume no
change in cost behaviour patterns.
Increase in operating income
$
30.100
Check my
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