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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 seguent margin Common fixed expenses not traceable to offices Net operating Income Total Company $ 450,000 100% 225.000 50% 225,000 SOX 126.000 99,000 220 Chicago $ 150,000 45,000 105,000 70,000 $ 27,000 Office Minneapolis 100% $ 300,000 100% 30% 180,000 60% 70% 120,000 405 52 48.000 10 18% $ 22,000 24 3,000 $ 30,000 BX 2 By how much would the company's net operating income increase if Minneapolis increased its sales by $75,000 per year? Assume no change in cost behavior patterns. Net operating income ncrease 3. Assume that sales in Chicago increase $50,000 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).) Total Company Chicago Segments Minneapolis Amount 9 Amount % Amount
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