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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

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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 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 $ 975,000 100.0% 526,500 54.0% 448,500 46.0% 218,400 22.4% 230, 100 23.6 156,000 16.0 $ 74,100 7.64 Office Chicago Minneapolis $ 195,000 1009 $ 780,000 100% 58,500 304 468,000 68% 136,500 78% 312,000 48% 101,400 52% 117,000 15% $ 35, 100 18% $ 195,000 254 3. Assume that sales in Chicago increase by $65,000 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).) Segments Total Company Chicago Minneapolis Amount % % Amount $ 260,000 Sales $ 1,040,000 100.0 100.0 60.0 Variable expenses Contribution margin Traceable fixed expenses Amount 100.0 $ 780,000 468,000 30.0 312.000 117,000 30.0 $ 195,000 1,040,000 100.0 260,000 40.0 15.0 1,040,000 100.0 $ 250,000 25.0 Office segment margin Common fixed expenses not traceable to segments Net operating income $ 1,040,000 100.0

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