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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 $ 562,500 100.0 % $ 112,500 100 % $ 450,000 100 %
Variable expenses 303,750 54.0 % 33,750 30 % 270,000 60 %
Contribution margin 258,750 46.0 % 78,750 70 % 180,000 40 %
Traceable fixed expenses 126,000 22.4 % 58,500 52 % 67,500 15 %
Office segment margin 132,750 23.6 % $ 20,250 18 % $ 112,500 25 %
Common fixed expenses not traceable to offices 90,000 16.0 %
Net operating income $ 42,750 7.6 %

3. Assume that sales in Chicago increase by $37,500 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 percentage answers to 1 decimal place (i.e. 0.1234 should be entered as 12.3).)

Segments
Total Company Chicago Minneapolis
Amount % Amount % Amount %
Salesselected answer correct not attempted 100.0selected answer correct not attempted not attempted not attempted not attempted
Variable expensesselected answer correct not attempted not attempted not attempted not attempted not attempted not attempted
Contribution marginselected answer correct 0 100.0 0 0.0 0 0.0
Traceable fixed expensesselected answer correct not attempted not attempted not attempted not attempted not attempted not attempted
not attempted 0 100.0 $0 0.0 $0 0.0
not attempted 90,000selected answer correct not attempted
Net operating incomeselected answer correct $(90,000) 100.0

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