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:

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?

2. By how much would the companys net operating income increase if Minneapolis increased its sales by $108,750 per year? Assume no change in cost behavior patterns.

Required information [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: Office Total company Minneapolis 217,500 100 870,000 100 60 Chicago Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Net operating income $1,087,500 100.0 65,250 308_ 30% 70% 587,250 500,250 .0 243,600 22.43 256,650 23.6% $39,150 174,000 16.0 5408 522,000 348,000 130,50 152,250 403 158 113,100 52 18 $ 217,500 25 $ 82,650 7.63 3. Assume that sales in Chicago increase by $72,500 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).) Segments Chicago Total Company Minneapolis Amount Amount Amount 0.0 0.0 0.0 0.0 S 0.0 S 0.0 0.0