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Raner, Harris and Chan is a consulting firm specializing in information systems for medical and dental clinics. The firm has

two offices$-$one in Chicago and one in Minneapolis. It 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 below:

How much would the company's net operating income increase if Minneapolis increased its sales by $$86,250$ per year? Assume no

change in cost behavior patterns.Raner, Harris and Chan is a consulting firm specializing in information systems for medical and dental clinics. The firm has two offices$$one in Chicago and one in Minneapolis. It classifies the direct costs of consulting jobs as variable costs. A contribution format segmented income statement for the company$$s most recent year is given below:

Total Company Office

Chicago Minneapolis

Sales $ $517,500100\mathrm{.}00\%$ $ $172,500100\mathrm{.}00\%$ $ $345,000100\mathrm{.}00\%$

Variable expenses $258,75050\mathrm{.}00\%51,75030\mathrm{.}00\%207,00060\mathrm{.}00\%$

Contribution margin $258,75050\mathrm{.}00\%120,75070\mathrm{.}00\%138,00040\mathrm{.}00\%$

Traceable fixed expenses $144,90028\mathrm{.}00\%89,70052\mathrm{.}00\%55,20016\mathrm{.}00\%$

Office segment margin $113,85022\mathrm{.}00\%$ $ $31,05018\mathrm{.}00\%$ $ $82,80024\mathrm{.}00\%$

Common fixed expenses not traceable to offices $72,45014\mathrm{.}00\%$

Net operating income $ $41,4008\mathrm{.}00\%$

$2.$ How much would the company$$s net operating income increase if Minneapolis increased its sales by $$86,250$ per year? Assume no change in cost behavior patterns.