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complete requirements Required information The following information applies to the questions displayed below.) Raner, Harris & Chan is a consulting firm that specializes in information
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Required information The following information applies to the questions displayed below.) 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: office Total Company Chicago Minneapolis Sales $ 535,500 100.00% $ 178,500 100.00% $ 357,000 100.000 Variable expenses 267, 750 50.00 53,550 30.004 214,200 60.00 Contribution margin 267, 750 50.000 124,95 70.00 142,800 Traceable fixed expenses 149.940 28.00 92,820 52.004 57,120 16.00% office segment margin 117,810 22.00% $ 32, 130 18.00 $ 85,680 24.00 Common fixed expenses not traceable to offices 74,97 14.00 Net operating income $ 42,840 8.00 40.000 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? 2. By how much would the company's net operating income increase if Minneapolis increased its sales by $89,250 per year? Assume no change in cost behavior patterns. Net operating income increase 3. Assume that sales in Chicago increase by $59,500 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 intermediate calculations and percentage answers to 1 decimal place (i.e. 0.1234 should be entered as 12.3 and other answers to the nearest whole dollar.) Total Company Chicago Segments Minneapolis % Amount % Amount % Amount Step by Step Solution
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