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Che Raner, Harris & Chan is a consulting firm that specializes in information systems for medical and dental clinics. The firm has two offices-one in
Che 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 $ 862,500 100.0% 465,750 54.2% 396,750 46.0% 193,200 22.4% 203,550 23.6% 138,000 16.0% $ 65,550 7.6% office Chicago Minneapolis $ 172,500 100% $ 690,000 100x 51,750 sex 414,000 60% 120,750 70% 276,000 40% 89,700 52% 103,500 15% $ 31,050 18% $ 172,500 25% 3. Assume that sales in Chicago increase by $57,500 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 3. Assume that sales in Chicago increase by $57,500 next year and that sales in Minneapolis remain unchanged. Assume no change in fixed costs. a. Prepare a new segmented income statement for the company. (Round your percentage answers to 1 decimal place (i.e. 0.1234 should be entered as 12.3).) Total Company Amount % Chicago Amount Segments Minneapolis Amount % % 0 0.0 0 0.0 0.0 Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to segments Net operating income 0 0.01$ 0 0.0 $ 0 0.0 $ 0.0
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