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?

2) By how much would the companys net operating income increase if Minneapolis increased its sales by $67,500 per year? Assume no change in cost behavior patterns.

3) Assume that sales in Chicago increase by $45,000 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).)

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: Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Net operating income Total Company $ 675,000 100.0% 364,500 54.0% 310,500 46.0% 151,200 22.4% 159,300 23.6% 108,000 16.03 $ 51,300 7.6% Office Chicago Minneapolis $ 135,000 100% $ 540,000 100% 40,500 30% 324,000 60% 94,500 70% 216,000 40% 70,200 52% 81,000 15% $ 24,300 18% $ 135,000 25%