Question
Raner, Harris and Chan is a consulting firm that specializes in information systems for medical and dental clinics. The firm has two officesone in Chicago
Raner, Harris and Chan is a consulting firm that specializes in information systems for medical and dental clinics. The firm has two officesone 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 companys most recent year is given:
Total Company Office Chicago Minneapolis Sales $ 486,000 100.00% $ 162,000 100.00% $ 324,000 100.00% Variable expenses 243,000 50.00% 48,600 30.00% 194,400 60.00% Contribution margin 243,000 50.00% 113,400 70.00% 129,600 40.00% Traceable fixed expenses 136,080 28.00% 84,240 52.00% 51,840 16.00% Office segment margin 106,920 22.00% $ 29,160 18.00% $ 77,760 24.00% Common fixed expenses not traceable to offices 68,040 14.00% Net operating income $ 38,880 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?
Required information The following information applies to the questions displayed below] Raner. Harris and Chan is a consulting firm that specializes in information systems for medical and Jental 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 or the company's most recent year is given: 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? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Compute the companywide break-even point in dollar sales. (Round your final answer to the nearest whole number.) 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? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Compute the break-even point for the Chicago office and for the Minneapolis office. (Round your final answer to the nearest whole number.)
Raner, Harris and Chan is a consulting firm that specializes in information systems for medical and dental clinics. The firm has two officesone 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 companys most recent year is given:
Total Company | Office | |||||
---|---|---|---|---|---|---|
Chicago | Minneapolis | |||||
Sales | $ 486,000 | 100.00% | $ 162,000 | 100.00% | $ 324,000 | 100.00% |
Variable expenses | 243,000 | 50.00% | 48,600 | 30.00% | 194,400 | 60.00% |
Contribution margin | 243,000 | 50.00% | 113,400 | 70.00% | 129,600 | 40.00% |
Traceable fixed expenses | 136,080 | 28.00% | 84,240 | 52.00% | 51,840 | 16.00% |
Office segment margin | 106,920 | 22.00% | $ 29,160 | 18.00% | $ 77,760 | 24.00% |
Common fixed expenses not traceable to offices | 68,040 | 14.00% | ||||
Net operating income | $ 38,880 | 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?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started