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By how much would the companys net operating income increase if Minneapolis increased its sales by $82,500 per year? Assume no change in cost behavior
By how much would the companys net operating income increase if Minneapolis increased its sales by $82,500 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 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 officer Net operating income Total Company $ 495,000 100.000 247.500 50.000 247,500 50.000 138,600 28.000 108,900 22.000 59,300 14.000 $ 39,600 8.000 Office Chicago Minneapolis $ 165,000 100.000 $ 330,000 100.000 49,500 30.000 190.000 60.000 115,500 70.001 132.000 40.000 85,800 52.000 52,300 16.000 $ 29,700 18.00 $ 79,200 24.005 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? Req 1A Req 1B Req 1c Compute the companywide break-even point in dollar sales. (Round "CM ra nearest whole number.) Break-even point in dollar sales Req 1A Req 1B Req 1C Compute the break-even point for the Chicago office and for the Minnea final answer to the nearest whole number.) Break-even Point Chicago office Minneapolis office Req 1A Req 1B Req 11 Is the companywide break-even point greater than, less points? Greater than OLess than O Equal to Step by Step Solution
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