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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: Office Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Operating income Increase in operating income Required: 1. By how much would the company's operating income increase if Vancouver increased its sales by $87,000 per year? Assume no change in cost behaviour patterns. $ Toronto Total Company Vancouver $900,000 100.0% $120,000 100% $780,000 100% 414,000 46.00 486,000 54.00 24,000 20 390,000 50 96,000 80 390,000 50 187,200 20.80 46,800 39 140,400 18 298,800 33.20 $ 49,200 41% $249,600 32% 43,500 117,000 13.00 $181,800 20.20% 2-a. Refer to the original data. Assume that sales in Toronto increase by $75,000 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 $ P ol % 0.00 Toronto Amount ol Segments % 0.00 Vancouver Amount 0 % 0.00

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: Office Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Operating income Increase in operating income Required: 1. By how much would the company's operating income increase if Vancouver increased its sales by $87,000 per year? Assume no change in cost behaviour patterns. $ Toronto Total Company Vancouver $900,000 100.0% $120,000 100% $780,000 100% 414,000 46.00 486,000 54.00 24,000 20 390,000 50 96,000 80 390,000 50 187,200 20.80 46,800 39 140,400 18 298,800 33.20 $ 49,200 41% $249,600 32% 43,500 117,000 13.00 $181,800 20.20% 2-a. Refer to the original data. Assume that sales in Toronto increase by $75,000 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 $ P ol % 0.00 Toronto Amount ol Segments % 0.00 Vancouver Amount 0 % 0.00

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter7: Allocating Costs Of Support Departments And Joint Products
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t 3 i not traceable to offices Operating income Increase in operating income Required: 1. By how much would the company's operating income increase if Vancouver increased its sales by $87,000 per year? Assume no change in cost behaviour patterns. 2.b Thin $ + 43,500 ******** 117,000 13.00 $181,800 20.20% 2-a. Refer to the original data. Assume that sales in Toronto increase by $75,000 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.) Saved Total Company Amount $ $ $ your Connect assignment 0 0 0 % 0.00 0.00 0.00 Toronto Amount $ 0 0 Segments % 0.00 Vancouver Amount 0.00 $ 0 0 % 0.00 H 0.00
Transcribed Image Text:t 3 i not traceable to offices Operating income Increase in operating income Required: 1. By how much would the company's operating income increase if Vancouver increased its sales by $87,000 per year? Assume no change in cost behaviour patterns. 2.b Thin $ + 43,500 ******** 117,000 13.00 $181,800 20.20% 2-a. Refer to the original data. Assume that sales in Toronto increase by $75,000 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.) Saved Total Company Amount $ $ $ your Connect assignment 0 0 0 % 0.00 0.00 0.00 Toronto Amount $ 0 0 Segments % 0.00 Vancouver Amount 0.00 $ 0 0 % 0.00 H 0.00
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: Office Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Operating income Increase in operating income $ Total Company $900,000 100.0% 414,000 46.00 486,000 54.00 187,200 20.80 298,800 33.20 Required: 1. By how much would the company's operating income increase if Vancouver increased its sales by $87,000 per year? Assume no change in cost behaviour patterns. 43,500 117,000 13.00 $181,800 20.20% Toronto Vancouver $120,000 100% $780,000 100% 390,000 50 24,000 20 96,000 80 390,000 50 140,400 18 46,800 39 $ 49,200 41% $249,600 32% 2-a. Refer to the original data. Assume that sales in Toronto increase by $75,000 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.) < Prev Total Company Amount $ 0 2 of 4 % 0.00 # Toronto Amount 01 Next > Segments % 0.00 Vancouver Amount 0 % 0.00
Transcribed Image Text: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: Office Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Operating income Increase in operating income $ Total Company $900,000 100.0% 414,000 46.00 486,000 54.00 187,200 20.80 298,800 33.20 Required: 1. By how much would the company's operating income increase if Vancouver increased its sales by $87,000 per year? Assume no change in cost behaviour patterns. 43,500 117,000 13.00 $181,800 20.20% Toronto Vancouver $120,000 100% $780,000 100% 390,000 50 24,000 20 96,000 80 390,000 50 140,400 18 46,800 39 $ 49,200 41% $249,600 32% 2-a. Refer to the original data. Assume that sales in Toronto increase by $75,000 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.) < Prev Total Company Amount $ 0 2 of 4 % 0.00 # Toronto Amount 01 Next > Segments % 0.00 Vancouver Amount 0 % 0.00
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