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! Required information [The following information applies to the questions displayed below.) Raner, Harris & Chan is a consulting firm that specializes in information systems
! 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 $ 453,000 100% 226,500 508 226,500 50% 126,840 28% 99,660 228 63,420 14% $ 36, 240 8% Office Chicago Minneapolis 151,500 100% $ 301,500 100% 45,450 30% 180,900 60% 106,050 708 120,600 40% 78,780 528 48,240 16% $ 27,270 188 $ 72,360 24% 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 company's net operating income increase if Minneapolis increased its sales by $75,500 per year? Assume no change in cost behavior patterns. Net operating income increase
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