1 Required information [The following information applies to the questions displayed below.) Part 1 of 3 Raner, Harris & Chan is a consulting firm that specializes in information systems for medical and dental clinics. The firm has two offices-one in Chicago and one in Minneapolis. The firm classifies the direct costs of consulting jobs as variable costs. A contribution format segmented income statement for the company's most recent year is given: 0.5 olnts Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Net operating income Total Company $ 975,000 100.0% 526,500 54.6% 448,500 46.0% 218,400 22.4% 230,100 23.6% 156,000 16.0% $ 74,100 7.6% Office Chicago Minneapolis $ 195,000 100% $ 780,000 100% 58,500 30% 468,000 60% 136,500 70% 312,000 40% 101,400 52% 117,000 15% 35,100 18% $ 195,000 25% eBook References Required: 1-a. Compute the companywide break-even point in dollar sales. 1-b. Compute the break-even point for the Chicago office and for the Minneapolis office. 1-c. Is the companywide break-even point greater than, less than or equal to the sum of the Chicago and Minneapolis break-even points? ! Required information [The following information applies to the questions displayed below.] Raner, Harris & Chan is a consulting firm that specializes in information systems for medical and dental clinics. The firm has two officesone in Chicago and one in Minneapolis. The firm classifies the direct costs of consulting jobs as variable costs. A contribution format segmented income statement for the company's most recent year is given: Sales Variable expenses Contribution margin Traceable fixed expenses office segment margin Common fixed expenses not traceable to offices Net operating income Total Company $ 975,000 100.0% 526,500 54.9% 448,500 46.0% 218,400 22.4% 230, 100 23.6% 156,000 16.0% 74,100 7.6% Office Chicago Minneapolis $ 195,000 100% $ 780,000 100% 58,500 30% 468,000 60% 136,500 70% 312,000 40% 101,400 52% 117,000 15% $ 35,100 18% $ 195,000 25% 3. Assume that sales in Chicago increase by $65,000 next year and that sales in Minneapolis remain unchanged. Assume no change in fixed costs. a. Prepare a new segmented income statement for the company. (Round your percentage answers to 1 decimal place (i.e. 0.1234 should be entered as 12.3).) Segments Chicago Minneapolis Total Company Amount % Amount % Amount % 0 0.0 0 0.0 0 0.01 0 0.0 $ 0 0.0 $ 0 0.0 $ 0 0.0 Assume that Minneapolis' sales by major market are: 4 Minneapolis $900,000 100% 540,000 60% 360,000 40% 108,000 12% 252,000 28% Sales Variable expenses Contribution margin Traceable fixed expenses Market segment margin Common fixed expenses not traceable to markets Office segment margin Market Medical Dental $600,000 100% $300,000 100% 390,000 65% 150,000 50% 210,000 35% 150,000 50% 30,000 5% 78,000 26% $ 180,000 30% $ 72,000 24% 0.5 points 27,000 $225,000 3% 25% eBook References The company would like to initiate an intensive advertising campaign in one of the two market segments during the next month. The campaign would cost $12,000. Marketing studies indicate that such a campaign would increase sales in the Medical market by $105,000 or increase sales in the Dental market by $90,000. Required: 1. How much would the company's profits increase (decrease) if it implemented the advertising campaign in the Medical Market? 2. How much would the company's profits increase (decrease) if it implemented the advertising campaign in the Dental Market? 3. In which of the markets would you recommend that the company focus its advertising campaign