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O Required information (The following information applies to the questions displayed below) Raner, Harris & Chan is a consulting firm that specializes in Information systems
O 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: Sales Variable expenses Contribution margin Traceable fixed expenses office segment margin Common fixed expenses not traceable to ottice Not operating income Total Company $ 454,500 100.004 227,250 50.000 227,250 50.000 127.260 28.000 99,990 22.000 Orrico Chicago Rinneapolis 5 151,500 100.000 $ 303,000 100.000 45,450 30.000 181,800 60.000 106,050 70.000 121,200 40.000 78.200 52.000 40,400 16.000 $ 27,270 10.000 5 72.720 24.001 63,630 $. 36,360 16.000 8.00 2. By how much would the company's net operating income increase if Minneapolls increased its sales by $75,750 per year? Assume no change in cost behavior patterns. Not operating income increase
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