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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 $ 495,000 100.00% 247,500 50.00% 247,500 50.00% 138,600 28.00% 108,900 22.00% 69,300 14.00% $ 39,600 8.00% Office Chicago Minneapolis $ 165,000 100.00% $ 330,000 100.00% 49,500 30.00% 198,000 60.00% 115,500 70.00% 132,000 40.00% 85,800 52.00% 52,800 16.00 $ 29,700 18.00% $ 79,200 24.00% 3. Assume that sales in Chicago increase by $55,000 next year and that sales in Minneapolis remain unchanged. Assume in fixed costs. change a. Prepare a new segmented income statement for the company. (Round your intermediate calculations and percentage answers to 1 decimal place (i.e. 0.1234 should be entered as 12.3 and other answers to the nearest whole dollar.))
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