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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 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 522,000 348,000-40%- Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Net operating income $1,087,500 100.08 $217,500 1008 $870,000 100% 60% 250 46.08 250 30g 243,600 22.4% 113,100 52% 65,250 46.0%-152,250 587,250 54.0% 70% 130,500 156 25% 256,650 23.6% $39,150 18% $217,500 174,000 $82,650 16.0% 7.6% 2. By how much would the company's net operating income increase if Minneapolis increased its sales by $108,750 per year? Assume no change in cost behavior patterns Net operating income increase
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