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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 Office Total Company Chicago Minneapolis Sales Variable expenses Contribution marqin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Net operating income $1,087,500 100.0% $217,500 65,250 152,250 113,100 100% 30% 70% 52% $870,000 522,000 348,000 130,500 100% 60% 40% 15% 587,250 54.0% 500,250 243,600 22.4% 256,650 23.6% $39,150 18% $217,500 25% 174,000 82,650 46.0% 16.0% 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
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