Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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 $ 825,000 100.0 % $ 165,000 100 % $ 660,000 100 %
Variable expenses 445,500 54.0 % 49,500 30 % 396,000 60 %
Contribution margin 379,500 46.0 % 115,500 70 % 264,000 40 %
Traceable fixed expenses 184,800 22.4 % 85,800 52 % 99,000 15 %
Office segment margin 194,700 23.6 % $ 29,700 18 % $ 165,000 25 %
Common fixed expenses not traceable to offices 132,000 16.0 %
Net operating income $ 62,700 7.6 %

Required:

1-a. Compute the companywide break-even point in dollar sales.

1-b. Compute the break-even point for the Chicago office and for the Minneapolis office.

1-c. Is the companywide break-even point greater than, less than, or equal to the sum of the Chicago and Minneapolis break-even points?

image text in transcribed
image text in transcribed
image text in transcribed
Era The following information applies to the questions displayed below.) 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 $ 825,000 100.0% 445,500 54.0% 379,500 46.0% 184,800 22.455 194,700 23.6% 132,000 16.0% $ 62,700 7.6% Office Chicago Minneapolis $ 165,000 100% $662,800 100% 49,500 38% 396,000 115,500 79% 264,000 40% 85,800 52% 99,000 15% $ 29,700 18% $ 165,800 25% Required: 1-a. Compute the companywide break-even point in dollar sales. 1-5. Compute the break-even point for the Chicago office and for the Minneapolis office Ic Is the companywide break-even point greater than, less than or equal to the sum of the Chicago and Minneapolis break-even points? Complete this question by entering your answers in the tabs below. Reg 1A Req 18 Req 1C Compute the companywide break-even point in dollar sales. (Round "CM ratio to 2 decimal places and final answer to the nearest whole dollar amount.) Bevon point in dollar sales Reg 1B > Complete this question by entering your answers in the tabs below. Reg 1A Req 1B Req 10 Compute the break-even point for the Chicago office and for the Minneapolis office. (Round "CM rati final answers to the nearest whole dollar amount.) Break Even Point Chicago office Minneapolis office Required: 1a Compute the companywide break-even point in dollar sales. 1-b. Compute the break-even point for the Chicago office and for the Minneapolis office. 1-e. Is the companywide break-even point greater than, less than or equal to the sum of the Chicago and M points? Complete this question by entering your answers in the tabs below. Reg 1A Reg 1B Req 10 is the companywide break-even point greater than, less than, or equal to the sum of the Chicago and Minneapo points? Greater than Less than Equal to

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Management Systems Auditing A Practitioners Guide To Quality And Management Systems Audit

Authors: Dr Warren Doudle

1st Edition

B0C6W3G4W4, 979-8397130271

More Books

Students also viewed these Accounting questions