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Raner, Harris & Chan is a consulting firm specializing in information systems for medical and dental clinics. The firm has two officesone in Chicago and

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Raner, Harris \& Chan is a consulting firm specializing in information systems for medical and dental clinics. The firm has two officesone in Chicago and one in Minneapolis. It 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 below: Required: 1. Compute the companywide breakeven point in dollar sales. Also, compute the breakeven point for the Chicago office and for the Minneapolis office. Is the companywide breakeven point greater than, less than, or equal to the sum of the Chicago and Minneapolis break-even points? Why? 2. How much would the company's net operating income increase if Minneapolis increased its sales by $75,000 per year? Assume no change in cost behavior patterns. 3. Refer to the original data. Assume sales in Chicago increase by $50,000 next year and sales in Minneapolis and all fixed costs remain unchanged. a. Prepare a new segmented income statement for the company using the above format. Show both amounts and percentages: b. Compare the income statement you prepared in requirement 3a to the original data. Did the Chicago office's contribution margin ratio change? Why? Did its segment margin ratio change? Why

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