Raner, Harris and Chan is a consulting firm specializing in information systems for medical and dental...
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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 $ 531,000 100.00% Variable expenses 265,500 50.00% $ 177,000 53,100 100.00% $ 354,000 100.00% 30.00% 212,400 60.00% Contribution margin 265,500 50.00% 123,900 70.00% 141,600 40.00% Traceable fixed expenses 148,680 28.00% 92,040 52.00% 56,640 16.00% Office segment margin 116,820 22.00% $ 31,860 18.00% $ 84,960 24.00% Common fixed expenses not traceable to offices 74,340 14.00% Net operating income $ 42,480 8.00% Exercise 6-16 Part 3 (Algo) Working with a Segmented Income Statement; Break-Even Analysis [LO6-4, .06-5] 3. Assume sales in Chicago increase by $59,000 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.) 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 $ 531,000 100.00% Variable expenses 265,500 50.00% $ 177,000 53,100 100.00% $ 354,000 100.00% 30.00% 212,400 60.00% Contribution margin 265,500 50.00% 123,900 70.00% 141,600 40.00% Traceable fixed expenses 148,680 28.00% 92,040 52.00% 56,640 16.00% Office segment margin 116,820 22.00% $ 31,860 18.00% $ 84,960 24.00% Common fixed expenses not traceable to offices 74,340 14.00% Net operating income $ 42,480 8.00% Exercise 6-16 Part 3 (Algo) Working with a Segmented Income Statement; Break-Even Analysis [LO6-4, .06-5] 3. Assume sales in Chicago increase by $59,000 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.)
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Related Book For
Managerial Accounting
ISBN: 9781260247787
17th Edition
Authors: Ray Garrison, Eric Noreen, Peter Brewer
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