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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:

Total Company Office
Chicago Minneapolis
Sales $ 531,000 100.00% $ 177,000 100.00% $ 354,000 100.00%
Variable expenses 265,500 50.00% 53,100 30.00% 212,400 60.00%
Contribution margin 265,500 50.00% 123,900 70.00% 141,600 40.00%
Traceable fixed expenses 148,680 28.00% 92,040 52.00% 56,640 16.00%
Office segment margin 116,820 22.00% $ 31,860 18.00% $ 84,960 24.00%
Common fixed expenses not traceable to offices 74,340 14.00%
Net operating income $ 42,480 8.00%

rev: 06_09_2020_QC_CS-215744, 09_15_2020_QC_CS-220558, 11_04_2020_QC_CS-238526, 03_30_2021_QC_CS-258090

2. By how much would the companys net operating income increase if Minneapolis increased its sales by $88,500 per year? Assume no change in cost behavior patterns.

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