Question

Middleton Associates is a consulting firm that specializes in information systems for construction and landscaping companies, The flrm has two offices - one in. Toronto and one in Vancouver. The firm

Answer 1

Middleton Associates, a consulting firm specializing in information systems for construction and landscaping companies, operates from two offices - one in Toronto and one in Vancouver.

Step-by-step explanation:

Middleton Associates, a consulting firm, focuses its expertise on information systems tailored for construction and landscaping companies. With a presence in two key locations, Toronto and Vancouver, the firm strategically positions itself to serve clients in both regions efficiently.

Specializing in information systems indicates Middleton Associates' commitment to providing technology solutions specifically designed for the unique needs and challenges of construction and landscaping businesses. The firm's dual office locations in Toronto and Vancouver suggest a broad geographic reach, allowing them to cater to clients in different markets.

The decision to establish offices in these specific cities may be influenced by factors such as client concentration, industry demand, or regional growth opportunities. Additionally, the dual-office structure underscores Middleton Associates' commitment to providing localized support and expertise to clients in both Toronto and Vancouver, contributing to a more tailored and responsive service approach.

Answer 2

The company's operating income would decrease by $71,250 if Vancouver increased its sales by $75,000 per year.

Step-by-step explanation:

To calculate the increase in the company's operating income if Vancouver increased its sales by $75,000 per year, we need to determine the impact of this increase on the office segment margin and then on the overall operating income.

1. Calculate the percentage increase in Vancouver's sales:

• Increase in sales = $75,000
• Percentage increase = (Increase in sales / Vancouver's current sales) * 100
• Percentage increase = ($75,000 / $600,000) * 100
• Percentage increase = 12.5%

2. Calculate the increase in Vancouver's office segment margin:

• Increase in office segment margin = Percentage increase * Vancouver's current office segment margin
• Increase in office segment margin = 12.5% * $150,000
• Increase in office segment margin = $18,750

3. Calculate the increase in the company's operating income:

• Increase in operating income = Increase in office segment margin - Increase in traceable fixed expenses
• Increase in operating income = $18,750 - $90,000 (since traceable fixed expenses are not affected by the increase in sales)
• Increase in operating income = -$71,250

Therefore, the company's operating income would decrease by $71,250 if Vancouver increased its sales by $75,000 per year. This decrease occurs because the increase in sales does not cover the additional traceable fixed expenses, resulting in a negative impact on the overall operating income.

Your question is incomplete, but most probably the full question was:

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

Total Company Toronto Vancouver

Sales $750,000 100.0% $150,000 100% $600,000 100%

Variable expenses 405,000 54.0 45,000 30 360,000 60

Contribution margin 345,000 46.0 105,000 70 240,000 40

Traceable fixed expenses 168,000 22.4 78,000 52 90,000 15

Office segment margin 177,000 23.6 27,000 18 150,000 25

Common fixed expenses

not traceable to offices 120,000 16.0

Operating income $57,000 7.6%

Required:

By how much would the company's operating income increase if Vancouver increased its sales by $75,000 per year?

Assume no change in cost behaviour patterns.