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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
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 Sales $450,000 100% Chicago $ 150,000 Variable expenses 225,000 50% 45,000 100% 30 Minneapolis $ 300,000 100% 180,000 60 Contribution margin 225,000 50% 105,000 70% 120,000 40% Traceable fixed expenses 126,000 28 78,000 521 48,000 168 Office segment margin 99,000 Common fixed expenses not traceable to offices. 63,000 228 149 $ 27,000 18 $ 72,000 248 Net operating income: $ 36,000 86 3. Assume that sales in Chicago increase by $50,000 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 % 100.0 100.0 100.0 30.0 60.0 0 100.0 0 70.0 0 40.0 39.0 0 100.0 $ 0 31.0 $ 0 40.0 $ 0 100.0
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