Marple Associates is a consulting firm that specializes in information systems for construction and landscaping companies. The firm has two offices-one in Houston and one in Dallas. 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 |
Houston |
Dallas |
| Sales |
$ |
637,500 |
100.0 |
% |
$ |
127,500 |
100 |
% |
$ |
510,000 |
100 |
% |
| Variable expenses |
|
344,250 |
54.0 |
|
|
38,250 |
30 |
|
|
306,000 |
60 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Contribution margin |
|
293,250 |
46.0 |
|
|
89,250 |
70 |
|
|
204,000 |
40 |
|
| Traceable fixed expenses |
|
142,800 |
22.4 |
|
|
66,300 |
52 |
|
|
76,500 |
15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Office segment margin |
|
150,450 |
23.6 |
|
$ |
22,950 |
18 |
% |
$ |
127,500 |
25 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Common fixed expenses not
traceable to offices |
|
102,000 |
16.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net operating income |
$ |
48,450 |
7.6 |
% |
|
| 1. |
By how much would the company's net operating income increase if Dallas increased its sales by $63,750 per year? Assume no change in cost behavior patterns.
|
| 2. |
Refer to the original data. Assume that sales in Houston increase by $42,500 next year and that sales in Dallas remain unchanged. Assume no change in fixed costs.
|
Prepare a new segmented income statement for the company. (Round your percentage answers to 1 decimal place. Input all amounts as positive values except losses which should be indicated by a minus sign.)
Segments
Total Company Houston Dallas
Amount % Amount % Amount %
(Click to Select) $ $ $
(Click to Select)
(Click to Select)
(Click to Select)
(Click to Select)
(Click to Select) $ $
(Click to Select) $