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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 $ 562,500 100.08 303,750 54.0% 258,750 46.0% 126,000 22.4% 132,750 23.6% 90,000 16.0% $ 42,750 7.6% office Chicago Minneapolis $ 112,500 100% $ 450,000 100% 33,750 308 270,000 603 78, 750 70% 180,000 40% 58,500 528 67,500 15% $ 20,250 189 $ 112,500 25% Exercise 6-16 Part 3 3. Assume that sales in Chicago increase by $37,500 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).) Total Company Amount % Chicago Amount Segments Minneapolis Amount % %
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