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Required information SB Exercise 7-16 through Exercise 7-17 (Algo [The following information applies to the questions displayed below.) Raner, Harris & Chan is a consulting
Required information SB Exercise 7-16 through Exercise 7-17 (Algo [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 $ 507,000 100% 253,500 50% 253,500 50 141,960 28% 111,540 224 70,980 14% $ 40,560 89 Office Chicago Minneapolis $ 178,500 100% $ 328,500 100% 53,550 30 197, 109 60% 124,950 789 131,400 40% 92,820 52% 52,560 164 $ 32,130 18% $ 78,840 24% Exercise 7-16 Part 2 (Algo) Working with a Segmented Income Statement; Break-Even Analysis (L07-4, L07-5) 2. By how much would the company's net operating income increase if Minneapolis increased its sales by $84,500 per year? Assume no change in cost behavior patterns. Net operating income increase
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