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:

OfficeTotal CompanyChicagoMinneapolisSales$937,500100.0%$187,500100%$750,000100%Variable expenses506,25054.0%56,25030%450,00060%Contribution margin431,25046.0%131,25070%300,00040%Traceable fixed expenses210,00022.4%97,50052%112,50015%Office segment margin221,25023.6%$33,75018%$187,50025%Common fixed expenses not traceable to offices150,00016.0%Net operating income$71,2507.6%

2. By how much would the company's net operating income increase if Minneapolis increased its sales by $93,750 per year? Assume no change in cost behavior patterns.

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:

OfficeTotal CompanyChicagoMinneapolisSales$937,500100.0%$187,500100%$750,000100%Variable expenses506,25054.0%56,25030%450,00060%Contribution margin431,25046.0%131,25070%300,00040%Traceable fixed expenses210,00022.4%97,50052%112,50015%Office segment margin221,25023.6%$33,75018%$187,50025%Common fixed expenses not traceable to offices150,00016.0%Net operating income$71,2507.6%

3. Assume that sales in Chicago increase by $62,500 next year and that sales in Minneapolis remain unchanged. Assume no change in fixed costs.

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).)