Multi Part Question

[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 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	$	498,000		100	%		$	174,000		100	%		$	324,000		1	%
Variable expenses		257,000		50	%			61,000		30	%			194,400		60	%
Contribution margin		241,000		50	%			113,000		70	%			129,600		40	%
Traceable fixed expenses		132,400		28	%			81,200		52	%			51,840		16	%
Office segment margin		108,600		22	%		$	31,800		18	%		$	77,760		24	%
Common fixed expenses not traceable to offices		71,000		14	%
Net operating income	$	37,600		8	%

rev: 06_09_2020_QC_CS-215744

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 companys net operating income increase if Minneapolis increased its sales by $83,000 per year? Assume no change in cost behavior patterns.

3. Assume that sales in Chicago increase by $58,000 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.))