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

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.)

		Net operating income	$ 30,000
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.)

			Segments
	Total Company		Houston		Dallas
	Amount	%	Amount	%	Amount	%
Sales	$ 800,000	100	$ 200,000	100	$ 600,000	100
Variable expenses	420,000	52.5	60,000	30	360,000	60
Contribution margin	380,000	47.5	140,000	70	240,000	40
Traceable fixed expenses	168,000	21.0	78,000	39	90,000	15
Office segment margin	212,000	26.5	62,000	31	150,000	25
Common fixed expenses not traceable to segments	120,000	15.0
Net operating income (loss)	$ 92,000	11.5