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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 for
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 Office Total Company Chicago Minneapolis $525,000 100.0% $105,000 100% $420,000 100% 283,500 54.0% 31,500 30% 252,000 60% 241,500 46.0% 73,500 70% 168,000 40% 117,600 22.4% 54,600 52% 63,000 15% 123,900 23.6% $ 18,900 18% $105,000 25% 84,000 $ 39,900 16.0% 7.6% 2. By how much would the company's net operating income increase if Minneapolis increased its sales by $52,500 per year? Assume no change in cost behavior patterns. Net operating income increase
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