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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
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: Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Net operating income Office Total Company $ 450,000 225,000 100% 50% 225,000 50% 126,000 28% 99,000 63,000 $ 36,000 22% 14% 8% Chicago $ 150,000 100% 45,000 30% 105,000 70% 78,000 52% $27,000 18% Minneapolis $ 300,000 180,000 60% 100% 120,000 40% 48,000 $ 72,000 16% 24% Exercise 7-16 Part 1 (Static) Working with a Segmented Income Statement; Break-Even Analysis [LO7-4, LO7-5] 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? Complete this question by entering your answers in the tabs below. 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? Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 10 Compute the companywide break-even point in dollar sales. Break-even point in dollar sales Show less A Req 1A Req 1B Req 1C Compute the break-even point for the Chicago office and for the Minneapolis office. (Round your final answers to the nearest whole dollar amount.) Chicago office Minneapolis office Break-even Point
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