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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 Total Company Chicago Minneapolis Sales $ 463,500 100.00% $ 154,500 Variable expenses 231,750 50.00% 46,350 100.00% 30.00% $ 309,000 100.00% 185,400 60.00% Contribution margin 231,750 50.00% Traceable fixed expenses 129,780 28.00% 108,150 80,340 70.00% 123,600 40.00% 52.00% 49,440 16.00% office segment margin. 101,970 22.00% $ 27,810 18.00% $ 74,160 24.00% Common fixed expenses not traceable to offices 64,890 Net operating income $ 37,080 14.00% 8.00% Required: 1-a. Compute the companywide break-even point in dollar sales. 1-b. Compute the break-even point for the Chicago office and for the Minneapolis office. 1-c. Is the companywide break-even point greater than, less than, or equal to the sum of the Chicago and Minneapolis break-even points
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