aner, 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 companys most recent year is given:

							Office
	Total Company						Chicago						Minneapolis
Sales	$	787,500		100.0	%		$	157,500		100	%		$	630,000		100	%
Variable expenses		425,250		54.0	%			47,250		30	%			378,000		60	%
Contribution margin		362,250		46.0	%			110,250		70	%			252,000		40	%
Traceable fixed expenses		176,400		22.4	%			81,900		52	%			94,500		15	%
Office segment margin		185,850		23.6	%		$	28,350		18	%		$	157,500		25	%
Common fixed expenses not traceable to offices		126,000		16.0	%
Net operating income	$	59,850		7.6	%

Exercise 6-16 Part 2

2. By how much would the companys net operating income increase if Minneapolis increased its sales by $78,750 per year? Assume no change in cost behavior patterns.