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 below: Office Total Company Chicago Minneapolis Sales $ 1,050,000 100.0 % $ 210,000 100 % $ 840,000 100 % Variable expenses 567,000 54.0 % 63,000 30 % 504,000 60 % Contribution margin 483,000 46.0 % 147,000 70 % 336,000 40 % Traceable fixed expenses 235,200 22.4 % 109,200 52 % 126,000 15 % Office segment margin 247,800 23.6 % $ 37,800 18 % $ 210,000 25 % Common fixed expenses not traceable to offices 168,000 16.0 % Net operating income $ 79,800 7.6 %

1-a.

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.)

1-b.

Compute the break-even point for the Chicago office and for the Minneapolis office. (Round "CM ratio" to 2 decimal places and final answers to the nearest whole dollar amount.)

1.

c. By how much would the companys net operating income increase if Minneapolis increased its sales by $105,000 per year? Assume no change in cost behavior patterns.

d. Refer to the original data. Assume that sales in Chicago increase by $70,000 next year and that sales in Minneapolis remain unchanged. Assume no change in fixed costs.

Prepare a new segmented income statement for the company. (Round your percentage answers to 1 decimal place (i.e .1234 should be entered as 12.3))