Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Raner, Harris and Chan is a consulting firm specializing in information systems for medical and dental clinics. The firm has two offices-one in Chicago


 

Raner, Harris and Chan is a consulting firm specializing in information systems for medical and dental clinics. The firm has two offices-one in Chicago and one in Minneapolis. It 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 below: Office Total Company Chicago Minneapolis Sales $ 522,000 Variable expenses 261,000 100.00% 50.00% Contribution margin 261,000 50.00% Traceable fixed expenses 146,160 28.00% $ 174,000 52,200 121,800 90,480 100.00% 30.00% $ 348,000 100.00% 208,800 60.00% Office segment margin 114,840 22.00% $ 31,320 70.00% 52.00% 18.00% 139,200 40.00% 55,680 16.00% $ 83,520 24.00% Common fixed expenses not traceable to offices 73,080 14.00% Net operating income $ 41,760 8.00% Exercise 6-16 Part 3 (Algo) Working with a Segmented Income Statement; Break-Even Analysis [LO6-4, LO6-5] 3. Assume sales in Chicago increase by $58,000 next year and sales in Minneapolis and all fixed costs remain unchanged. a. Prepare a new segmented income statement for the company. Note: 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.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting

Authors: Ray Garrison, Eric Noreen, Peter Brewer

17th Edition

1260247783, 978-1260247787

More Books

Students also viewed these Accounting questions

Question

What pay system do you prefer? Why is this your preference?

Answered: 1 week ago