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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
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: Office Sales Variable expenses Contribution margin Office segment margin Traceable fixed expenses Common fixed expenses not traceable to offices Net operating income Total Company $ 472,500 100% 236,250 50% 236,250 50% 132,300 28% 103,950 22% 66,150 14% Chicago 30% 52% 18% Minneapolis $ 157,500 100% $ 315,000 100% 47,250 189,000 60% 110,250 70% 81,900 $ 28,350 126,000 40% 50,400 16% $ 75,600 24% $ 37,800 8% 3. Assume that sales in Chicago increase by $52,500 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 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.)) Total Company Amount Segments Chicago Minneapolis % Amount % Amount %
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