Raner, Harris, & 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 income statement for the company's most recent year is given below:

			Office
	Total Company		Chicago		Minneapolis
Sales	$975,000	100%	$195,000	100%	$780,000	100%
Variable expenses	526,500	54%	58,500	30%	468,000	60%
Contribution margin	448,500	46%	136,500	70%	312,000	40%
Traceable fixed expenses	218,400	22%	101,400	52%	117,000	15%
Office segment margin	230,100	24%	$35,100	18%	$195,000	25%
Common fixed expenses not traceable to offices	156,000	16%
Net operating income	$74,100	8%

Requirement 1:

By how much would the company's net operating income increase if Minneapolis increased its sales by $97,500 per year? Assume no change in cost behavior patterns.

Requirement 2: Refer to the original data. Assume that sales in Chicago increase by $65,000 next year and that sales in Minneapolis remain unchanged. Assume no change in fixed costs. Prepare a new segmented income statement for the company.(Round your percentage amounts to 2 decimal places.