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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 segment margin Common fixed expenses not traceable to offices Net operating income Total Company $ 750,000 100.0% 405,000 54.0% 345,000 46.0% 168,000 22.4% 177,000 23.6% 120,000 16.0% $ 57,000 7.6% Office Chicago Minneapolis $ 150,000 100% $ 600,000 100% 45,000 30% 360,000 60% 105,000 70% 240,000 40% 78,000 52% 90,000 15% $ 27,000 18% $ 150,000 25% 3. Assume that sales in Chicago increase by $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 Amount % Chicago Amount Segments Minneapolis Amount % % $ 0 0.0
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