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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: Chicago Sales Variable expenses Contribution margin Traceable fixed expenses office segment margin Cormon fixed expenses not traceable to offices Net operating income Total Company $ 450,000 100% 225,000 50% 225,000 50% 126,000 28% 99,000 22% 63,000 14% $ 36,000 8% $ 150,000 45,000 105,000 78,000 27,000 Office Minneapolis 100% $ 300,000 100% 30% 180,000 60% 70% 120,000 40% 52% 48,000 16% 18% $ 24% 72,000 2. By how much would the company's net operating income increase if Minneapolis increased its sales by $75,000 per year? Assume no change in cost behavior patterns. Net operating income increase
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