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Required information. [The following information applies to the questions displayed below.] Raner, Harris and Chan is a consulting firm that specializes in information systems for
Required information. [The following information applies to the questions displayed below.] Raner, Harris and 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: Office Sales Total Company $454,500 Chicago Minneapolis Variable expenses 227,250 100.00% 50.00% $151,500 100.00% 45,450 30.00% $ 303,000 181,800 100.00% 60.00% Contribution margin 227,250 50.00% 106,050 70.00% 121,200 40.00% Traceable fixed expenses 127,260 28.00% 78,780 52.00% 48,480 16.00% Office segment margin 99,998 22.00% $ 27,270 18.00% $ 72,720 24.00% Common fixed expenses not traceable to offices 63,638 14.00% Net operating income) $ 36,360 8.00% 2. By how much would the company's net operating income increase if Minneapolis increased its sales by $75,750 per year? Assume no change in cost behavior patterns Net operating income increase
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