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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
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: Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Net operating income Total Company $ 712,500 100.0% 384,750 54.0% 327,750 46.0% 159,600 22.4% 168, 150 23.6% 114,000 16.0% $ 54, 150 7.6% Office Chicago Minneapolis $ 142,500 100% $ 570,000 100% 42,750 30% 342,000 60% 99,750 70% 228,000 40% 74,100 52% 85,500 15% $ 25,650 18% $ 142,500 25% 3. Assume that sales in Chicago increase by $47,500 next year and that sales in Minneapolis remain unchanged. Assume no change in fixed costs. 3. Assume that sales in Chicago increase by $47,500 next year and that sales in Minneapolis remain unchanged. Assume no change in fixed costs. a. Prepare a new segmented income statement for the company. (Round your percentage answers to 1 decimal place (i.e. 0.1234 should be entered as 12.3).) Segments Total Company Chicago Minneapolis Amount % Amount % Amount %
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