Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

Required information [The following information applies to the questions displayed below.] Raner, Harris and Chan is a consulting firm that specializes in information systems

image text in transcribed

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 $ 450,000 100% $ 150,000 100% Minneapolis $ 300,000 100% Variable expenses 225,000 50% 45,000 30% 180,000 60% Contribution margin 225,000 50% 105,000 70% Traceable fixed expenses 126,000 288 78,000 52% 120,000 48,000 40% 168 Office segment margin 99,000 22% $ 27,000 18% $ 72,000 248 Common fixed expenses not traceable to offices 63,000 14% Net operating income $ 36,000 88 3. Assume that sales in Chicago increase by $50,000 next year and that sales in Minneapolis remain unchanged. Assume no change in fixed costs. a. Prepare a new segmented income statement for the company. (Round your percentage answers to 1 decimal place (i.e. 0.1234 should be entered as 12.3).) Sales Total Company Amount $ 500,000 Segments Chicago Minneapolis % Amount % Amount % 100.0 $200,000 100.0 $ 300,000 100.0

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Introductory Financial Accounting for Business

Authors: Thomas Edmonds, Christopher Edmonds

1st edition

978-1260299441

Students also viewed these Accounting questions

Question

As a zero coupon approaches maturity, the discount __________.

Answered: 1 week ago