: Apps M MGMT 131-s8013) + Middleton Associates is a consulting firm that specia

Question

: Apps M MGMT 131-s8013) + 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 onsulting jobs as variable costs. A segmented contribution format income statement for the company's most recent year is given below Office Toronto Vancouver Total Company 585,000 55.71 465,000 44.29 105,000 70 360,000 40 $ 1,050,000 100.00% $150,000 100% $900,000 100% Sales 45,000 30 540.000 60 Variable expenses Contribution margin 90,000 10 63,000 42 53,000 14.57 312,000 2971 S 42.000 28% $270,000 30% Traceable fixed expenses Office segment margin Common fixed éxpenises not traceable to offices 08,000 10.29 $ 204,000 19.43% Operating income Required 1. By how much would the company's operating income increase if Vancouver increased its sales by s94,000 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 $75,000 next year and that sales O Type here to search

Explanation / Answer

1 Increase in Vancouver sale 94000 Contribution margin ratio 40% Increae in operating income 37600 2 Total Company Toronto Vancouver Sales 1125000 100.00% 225000 100.00% 900000 100.00% Variable expenses 607500 54.00% 67500 30.00% 540000 60.00% Contribution margin 517500 46.00% 157500 70.00% 360000 40.00% Traceable fixed expenses 153000 13.60% 63000 28.00% 90000 10.00% Market segment margin 364500 32.40% 94500 42.00% 270000 30.00% Common fixed expenses 108000 Net operating income 256500

Related Questions

Navigate

• Browse (All)
• Browse #
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.