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! Required information [The following information applies to the questions displayed below.] Raner, Harris and Chan is a consulting firm specializing in information systems for
! Required information [The following information applies to the questions displayed below.] 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: Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Net operating income Total Company Net operating income increase $ 486,000 243,000 243,000 136,080 106,920 68,040 $ 38,880 100.00% 50.00% 50.00% 28.00% 22.00% 14.00% 8.00% Chicago $ 162,000 48,600 113,400 84,240 $ 29,160 Office 100.00% 30.00% 70.00% 52.00% 18.00% Minneapolis $ 324,000 194,400 129,600 51,840 $ 77,760 100.00% 60.00% 40.00% 16.00 % 24.00% 2. How much would the company's net operating income increase if Minneapolis increased its sales by $81,000 per year? Assume no change in cost behavior patterns.
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