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O Required information [The following information applies to the questions displayed below.] Raner, Harris and Chan is a consulting firm that specializes in information
O Required information [The following information applies to the questions displayed below.] Raner, Harris and 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: Total Company $450,000 225,000 100% 50% 225,000 50% 126,000 28 99,000 22 63,000 14 81 Sales Variable expenses Contribution margin Traceable fixed expenses office segment margin Connon fixed expenses not traceable to offices Net operating income $ 36,000 Chicago Office Minneapolis $ 150,000 100% $300,000 100% 45,000 30% 105,000 70% 78,000 $27,000 18 180,000 60% 52% 120,000 40% 48,000 16% $ 72,000 24 Assume that Minneapolis' sales by major market are: Market Minneapolis Sales Variable expenses $ 300,000 Contribution margin 100% 180,000 60% 120,000 401 Medical $ 200,000 100% 128,000 641 72,000 361 Dental $ 100,000 100% 52,000 526 Traceable fixed expenses 33,000 116 12,000 Market segment margin- 87,000 29 $ 60,000 61 30% 48,000 486 21,000 219 $27,000 278 Common fixed expenses not traceable to markets 15,000 51
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