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Required information (The following information applies to the questions displayed below. Raner, Harris & Chan is a consulting firm that specializes in information systems for
Required information (The following information applies to the questions displayed below. Raner, Harris & Chan is a consulting firm that specializes in information systems for medical and dental clinics. The firm has two officesone 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: Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Net operating income Total Company $ 507,000 100% 263,000 50% 244,000 50% 133,600 28% 110,400 22% 72,500 14% $ 37,900 8% Office Chicago Minneapolis $ 178,500 100% $ 328,500 1% 64,000 30% 197,100 60% 114,500 70% 131,400 40% 81,800 52% 52,560 16% $ 32,700 18% $ 78,840 24% Required: 1-a. Compute the companywide break-even point in dollar sales. 1-b. Compute the break-even point for the Chicago office and for the Minneapolis office. 1-c. Is the companywide break-even point greater than, less than or equal to the sum of the Chicago and Minneapolis break-even points
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