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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 officesone in Chicago

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 segmented income statement for the companys most recent year is given:

Office
Total Company Chicago Minneapolis
Sales $ 675,000 100.0 % $ 135,000 100 % $ 540,000 100 %
Variable expenses 364,500 54.0 % 40,500 30 % 324,000 60 %
Contribution margin 310,500 46.0 % 94,500 70 % 216,000 40 %
Traceable fixed expenses 151,200 22.4 % 70,200 52 % 81,000 15 %
Office segment margin 159,300 23.6 % $ 24,300 18 % $ 135,000 25 %
Common fixed expenses not traceable to offices 108,000 16.0 %
Net operating income $ 51,300 7.6 %

Exercise 7-16 Part 3

3. Assume that sales in Chicago increase by $45,000 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).)

image text in transcribed

Chicago Total Company Amount % Segments Minneapolis 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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