Question
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 Minneapolis Sales $ 481,500 Variable expenses 240,750 100.00% 50.00% Contribution margin 240,758 50.00% $ 160,500 48,150 112,350 100.00% 30.00% $ 321,000 100.00% 192,600 60.00% 70.00% 128,400 40.00% Traceable fixed expenses 134,820 28.00% 83,460 52.00% 51,368 16.00% Office segment margin 105,930 22.00% $ 28,890 18.00% $ 77,040 24.00% Common fixed expenses not traceable. to offices 67,410 14.00% Net operating income $ 38,520 8.00% 2. By how much would the company's net operating income increase if Minneapolis increased its sales by $80.250 per year? Assume no change in cost behavior patterns. Net operating income increase
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