Chicago office Raner, 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 below Office Total Company Chicago Minneapolis Sales $ 637,500 100 0 $ 127,500 100 $ 510,000 100 Variable expenses 344,250 54 0 38,250 30 306,000 60 Contribution margin 293,250 46 0 89,250 70 204,000 40 Traceable fixed expenses 142,800 22 4 66,300 52 76,500 15 Office segment margin 150,450 23 6 $ 22,950 18 $ 127,500 25 Common fixed expenses not traceable to offices 102,000 16 0 Net operating income $ 48,450 7 6 31 Required information Required 1 a Compute the companywide break even point in dollar sales (Round CM ratio to 2 decimal places and final answer to the nearest whole dollar amount ) Break Even Point in dollar sales 1 b Compute the break even point for the Chicago office and for the Minneapolis office (Round CM ratio to 2 decimal places and final answers to the nearest whole dollar amount ) Break Even Point Chicago office 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 A Greater than B Less than C Equal to 32 Required information 2 By how much would the companys net operating income increase if Minneapolis increased its sales by $63,750 per year Assume no change in cost behavior patterns NET OPERATING INCOME INCREASE 33 Required information 3 Refer to the original data Assume that sales in Chicago increase by $42,500 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 1234 should be entered as 12 3))

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Chicago office____ Raner, Harris, & Chan is a consulting firm that specializes in information systems for medical and dental clinics. The firm has two officesone

Chicago office____

Raner, 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 below:

					Office
	Total Company				Chicago				Minneapolis
Sales	$	637,500	100.0	%	$	127,500	100	%	$	510,000	100	%
Variable expenses		344,250	54.0	%		38,250	30	%		306,000	60	%

Contribution margin		293,250	46.0	%		89,250	70	%		204,000	40	%
Traceable fixed expenses		142,800	22.4	%		66,300	52	%		76,500	15	%

Office segment margin		150,450	23.6	%	$	22,950	18	%	$	127,500	25	%

Common fixed expenses not traceable to offices		102,000	16.0	%

Net operating income	$	48,450	7.6	%

31.

Required information

Required:

1-a.	Compute the companywide break-even point in dollar sales. (Round "CM ratio" to 2 decimal places and final answer to the nearest whole dollar amount.)
	Break Even Point in dollar sales:_____

1-b.

Compute the break-even point for the Chicago office and for the Minneapolis office. (Round "CM ratio" to 2 decimal places and final answers to the nearest whole dollar amount.)

	Break Even Point
Chicago office
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?

A	Greater than
B	Less than
C	Equal to

32.

Required information

2.	By how much would the companys net operating income increase if Minneapolis increased its sales by $63,750 per year? Assume no change in cost behavior patterns.
	NET OPERATING INCOME INCREASE:________

33.

Required information

3.	Refer to the original data. Assume that sales in Chicago increase by $42,500 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 .1234 should be entered as 12.3))

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