Questions 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 5 525, 000 100 . 07 5 105 , 000 1007 } 420 , 000 10DE Variable EXPENSES 283 , 500 54 . 07 31 , 500 308 252 , 000 607 Contribution margin 241 , 500 16 . 07 73, 500 707 407 Traceable Fixed EXPENSES 1 17 , 600 22 . 47 5 4, 600 527 53 , 000 157 Office segment margin 123 , 900 23 . 67 5 18 , 900 18 % $ 105 , 000 257 Common Fixed EXPENSES not traceable to Offices $4 , 000 16 . DE Net operating income 5 39 , 900 7 . 68 2 . By how much would the company's net operating income increase if Minneapolis increased its sales by $52, 500 per year ? Assume* no change in cost behavior patterns . Net operating income increase*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 $ 525, 000 100 . 07 $ 105 , 000 1007 $ 420 , 000 1007 Variable EXPENSES* 283 , 500 54 . 07 31 , 500 308 252 , 000 607 Contribution margin 241 , 500 46 . 07 73 , 500 168 , 000 408 Traceable Fixed EXPENSES 1 17 , 600 22 . 47 5.4 , 600 5 27 5.3, 000 157 Office segment margin 123 , 900 23 . 67 18 , 900 1BE $ 105 , 000 25% Common Fixed expenses not traceable to offices $4 , 000 16 . 07 Net operating income 39 , 900 1 . 67 3 . Assume that sales in Chicago increase by $35, 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 percentage answers to 1 decimal place ( i.e . 0.1234 should be entered as 12.3) . ) Segments Total Company Chicago Minneapolis Amount Amount Amount Sales Variable expenses Contribution margin O 0.0 O Traceable fixed EXPENSES Liffice Segment margin $ Common fixed Expenses not traceable to segments 0.0Northwood Company manufactures basketballs . The company has a ball that sells for $ 25. At present , the ball is manufactured in a small plant that relies heavily on direct labor workers . Thus , variable expenses are high , totaling $15. 00 per ball , of which 60% is direct labor cost . Last year, the company sold $4, 000 of these balls , with the following results ! Sales 164, 000 balls ! 5 1 , 600, 000 Variable EXPENSES* 950 , 000 Contribution margin $40 , 000 Fixed EXPENSES 427, 000 Net operating income 5 213, 000CM` Ratio Unit sales to break EVEN balls Degree of operating leverage
