Question - 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:
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|
|
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Office
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|
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Total Company
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Houston
|
Dallas
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|
Sales
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$750,000
|
100.00%
|
$150,000
|
100%
|
$600,000
|
100%
|
|
Variable Expenses
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405,000
|
54
|
45,000
|
30
|
360,000
|
60
|
|
Contribution margin
|
345,000
|
46
|
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 espenses not traceable to offices
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120,000
|
16
|
|
|
|
|
|
Net operating income
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$57,000
|
7.60%
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|
|
|
|
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.