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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 Total Company $ 450,000 Variable expenses 225,000 100% 50% Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Net operating income 225,000 50% 126,000 28% 99,000 22% 63,000 14% Chicago $ 150,000 100% 45,000 30% 105,000 70% 78,000 52% Minneapolis $ 300,000 100% 180,000 60% 120,000 40% 48,000 16% $ 27,000 18% $ 72,000 24% $ 36,000 8% 3. Assume that sales in Chicago increase by $50,000 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 %
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