Marple Associates is a consulting firm that specializes in information systems for construction and landscaping companies

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

$

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





































Net operating income

$

57,000

7.6

%





















Required:







1.

By how much would the company’s net operating income increase if Dallas increased its sales by $75,000 per year? Assume no change in cost behavior patterns. (Omit the \"$\" sign in your response.)

2.

Refer to the original data. Assume that sales in Houston increase by $50,000 next year and that sales in Dallas remain unchanged. Assume no change in fixed costs.



a.

Prepare a new segmented income statement for the company. (Input all amounts as positive values except losses which should be indicated by a minus sign. Round your percentage answers to 1 decimal place. Omit the \"$\" and \"%\" signs in your response.)


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