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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
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 $508,500 Chicago Minneapolis Variable expenses 254,250 100.00% 50.00% $ 169,500 100.00% $339,000 100.00% 50,850 30.00% 203,400 60.00% Contribution margin 254,250 50.00% 118,650 70.00% 135,600 40.00% Traceable fixed expenses 142,380 28.00% 88,140 52.00% 54,248 16.00% office segment margin 111,870 22.00% $30,510 18.00% $ 81,360 24.00% Common fixed expenses not traceable. to offices 71,190 14.00% Net operating income $ 40,600 8.00% 2. By how much would the company's net operating income increase if Minneapolis increased its sales by $84,750 per year? Assume no change in cost behavior patterns. Net operating income increase
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