Required information Exercise 6-16 Working with a Segmented Income Statement; Break-Even Analysis (L06-4, LO6-5] [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 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 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 $ 450,000 100% 225,000 50% 225,000 50% 126,000 28% 99,000 22% 63,000 14% $ 36,000 8% Office Chicago Minneapolis $ 150,000 100% $ 300,000 100% 45,000 30% 180,000 60% 105,000 70% 120,000 40% 78,000 52% 48.000 16% $ 27,000 18% $ 72,000 24% Exercise 6-16 Part 1 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? Complete this question by entering your answers in the tabs below. Show less A Req 1A Req 1B Req 10 Compute the companywide break-even point in dollar sales. (Round "CM ratio" to 2 decimal places.) Break-even point in dollar sales Exercise 6-16 Part 1 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? Complete this question by entering your answers in the tabs below. Show less A Req 1A Req 1B Req 10 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.) Break-even Point Chicago office Minneapolis office Exercise 6-16 Part 1 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? Complete this question by entering your answers in the tabs below. Show less A Req 1A Req 1B Req 10 ------- Is the companywide break-even point greater than, less than, or equal to the sum of the Chicago and Minneapolis break-even points? OGreater than OLess than O Equal to Exercise 6-16 Part 2 2. By how much would the company's net operating income increase if Minneapolis increased its sales by $75,000 per year? Assume no change in cost behavior patterns. Net operating income increase
