Raner , Harris & 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 5 525, 000 100 . 07 5 105, 000 1007 5. 420, 000 1007 Variable EXPENSES 283 , 500 54 . 07 31 , 500 307 252, 000 608 Contribution margin 241 , 500 46 . 07 13, 500 168 , 000 Traceable Fixed EXPENSES 1 17 , 600 22 . 47 5.4 , 500 527 53, 000 157 OFFICE segment margin 123 , 900 23 . 67 18, 900 18{ 5. 105, 000 25% Common Fixed EXPENSES not traceable to offices $4 , OOD 16 . 07 Net operating income 39, 900Raner, Harris & 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 $ 525, 000 100 . 07 $ 105, 000 1007 5. 420, 000 1007 Variable EXPENSES 283 , 500 54 . 07 31 , 500 307 252, 000 608 20' 95 Contribution margin 241, 500 73 , 500 708 168 , 000 407 Traceable Fixed EXPENSES 1 17 , 600 22 . 47 54, 600 527 53, 000 157 Office segment margin 123 , 900 23 . 67 5 18 , 900 18Z 5. 105 , 000 25% Common Fixed Expenses not traceable to offices $4, OOD 16 . DE Net operating income 5 39 , 900 3. Assume that sales in Chicago increase by $35, 000 next year and that sales in Minneapolis remain unchanged . Assume no change in fixed costs .Segments Total Company Chicago Minneapolis Amount Amount Amount Sales Variable expenses Contribution margin Traceable fixed EXPENSES Office segment margin 0.0 0.0 $ Common fixed expenses not traceable to segments