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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 Chicago Minneapolis Sales Variable expenses Contribution margin Traceable fixed expenses $ 525,000 283,500 241,500 117,600 100.0% 54.0% 46.0 % 22.4% $ 105,000 31,500 100% 30% $ 420,000 100% 252,000 60% 73,500 70% 168,000 40 % 54,600 52% 63,000 15% Office segment margin Common fixed expenses not traceable to offices Net operating income 123,900 84,000 $ 39,900 23.68 $ 18,900 16.0% 7.6% 18% $ 105,000 25% 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. 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 % 0 0.0 0 0.0 0 0.0 0 0.0 $ 0 0.0 $ 0 0.0 0 0.0
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