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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 Total Company Chicago Sales $ 454,500 100% $ 151,500 100% Minneapolis $ 303,000 100% Variable expenses 227, 250 50% 45, 450 30% 181, 800 60% Contribution margin 227, 250 Traceable fixed expenses 127, 260 Office segment margin 99, 990 50% 28% 22% 106,050 70% 121, 200 40% 78, 780 52% 48, 480 16% $ 27,270 18% $ 72, 720 24% Common fixed expenses not traceable to offices Net operating income 63, 630 14% $ 36, 360 8% 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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