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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 Chicago
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: Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Net operating income Total Company $ 526,500 100.000 263, 250 50.00% 263, 250 50.00% 147, 420 28.00% 115,830 22.00% Office Chicago Minneapolis $ 175,500 100.00% $ 351,000 100.000 52,650 30.00% 210,600 60.00% 122,850 70.000 140,400 40.00% 91,260 52.00% 56,160 16.00 $ 31,590 18.00% $ 84,240 24.00% 14.00% 73, 710 $ 42,120 8.00% 3. Assume that sales in Chicago increase by $58,500 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 intermediate calculations and percentage answers to 1 decimal place (i.e. 0.1234 should be entered as 12.3 and other answers to the nearest whole dollar.)) Answer is complete but not entirely correct. Total Company Chicago Segments Minneapolis Amount % Amount % Amount % 100.0 $ 234,000 100.0 100.0 50.0 70,200 30.0 60.0 $ 643,500 315,900 327,600 147,420 50.0 70.0 Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to segments Net operating income 40.0 $ 409,500 245,700 163,800 56,160 $ 107,640 163,800 91,260 $ 72,540 28.0 39.0 13.7 180, 180 22.0 31.0 26.3 14.0 73,710 $ 106,470 8.0
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