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Required information Exercise 7-16 Working with a Segmented Income Statement; Break-Even Analysis (L07-4, LO7-5) [The following information applies to the questions displayed below.) Raner, Harris
Required information Exercise 7-16 Working with a Segmented Income Statement; Break-Even Analysis (L07-4, LO7-5) [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 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 $1,012,500 100.00 546,750 54.00 465, 750 46.00 226,800 22.40 238,950 23.68 162,000 16.00 $ 76,950 7.68 Office Chicago Minneapolis $ 202,500 1000 $ 810,000 1000 60, 750 308 486,000 600 141,750 708 324,000 408 105,300 528 121,500 156 $ 36,450 188 $ 202,500 250 Exercise 7-16 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. Reg 1A Reg 1B Reg 10 Compute the companywide break-even point in dollar sales. (Round "CM ratio" to 2 decimal places and final answer to the nearest whole dollar amount.) Break-even point in dollar sales Reg 1A Req 18 > Complete this question by entering your answers in the tabs below. Reg 1A Reg 1B Req 1C 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 Reg 1A Reg 10 > Complete this question by entering your answers in the tabs below. Reg 1A Reg 1B Reg 10 Is the companywide break-even point greater than, less than or equal to the sum of the Chicago and Minneapolis break-even points? O Greater than Less than Equal to
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