working with a segmented income statement

Exercise 6-14 Working with a Segmented Income Statement [LO4]

[The following information applies to the questions displayed below.]

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 CompanyHoustonDallas
Sales$787,500100.0%$157,500100%$630,000100%
Variable expenses425,25054.047,25030378,00060

Contribution margin362,25046.0110,25070252,00040
Traceable fixed expenses176,40022.481,9005294,50015

Office segment margin185,85023.6$28,35018%$157,50025%

Common fixed expenses not
traceable to offices126,00016.0

Net operating income$59,8507.6%

referencesebook & resourceseBook: SEGMENTED INCOME STATEMENTS AND THE CONTRIBUTION APPROACH
Section BreakExercise 6-14 Working with a Segmented Income Statement [LO4]

1. value:
10.00 points
Exercise 6-14 Part 1

Required:

1.
By how much would the company’s net operating income increase if Dallas increased its sales by $78,750 per year? Assume no change in cost behavior patterns.

Net operating income$
check my workreferencesebook & resourceseBook: SEGMENTED INCOME STATEMENTS AND THE CONTRIBUTION APPROACH

WorksheetExercise 6-14 Part 1

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