2. By how much would the company's net operating income increase if Minneapolis increased its sales by $97,500 per year? Assume no change in cost behavior patterns.

Raner, Harris & Chan is a consulting firm that specializes in information systems for medical and dental clinics. The rm has two ofcesone in Chicago and one in Minneapolis. The rm classies the direct costs of consultingjobs as variable costs. A contribution format segmented income statement for the company's most recent year is given: Office Total Company Chicago Minneapolis Sales $ 975,000 100.0% $ 195,000 100% $ 780,000 100% Variable expenses 526,500 54.0% 58,500 30% 468,000 60% Contribution margin 448,500 46.0% 136,500 70% 312,000 40% Traceable fixed expenses 218,400 22.4% 101,400 52% 117,000 15% Office segment margin 230,100 23.6% $ 35.100 13* $ 195.000 25* Common fixed expenses not traceable to offices 156.000 15-0* Net operating income $ 74.100 7.6% [ 2. By how much would the company's net operating income increase if Minneapolis increased its sales by $97,500 per year? Assume no change in cost behavior patterns