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 $90,000 per year? Assume no change in cost behavior patterns.

3. Assume that sales in Chicago increase by $60,000 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).)

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: Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Net operating income Total Company $ 900,000 100.0% 486,000 54.0% 414,000 46.0% 201,600 22.4% 212,400 23.6% 144,000 16.0% $ 68,400 7.6% Office Chicago Minneapolis $ 180,000 100% $ 720,000 100% 54,000 30% 432,000 60% 126,000 70% 288,000 40% 93,600 52% 108,000 15% $ 32,400 18% $ 180,000 25%