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: Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Net operating income Total Company $ 525,000 100.0% 283,500 54.0% 241,500 46.0% 117,600 22.4% 123,900 23.6% 84,000 16.0% $ 39,900 7.6% Office Chicago Minneapolis $ 105,000 100% $ 420,000 100% 31,500 30% 252,000 60% 73,500 70% 168,000 40% 54,600 52% [ 63,000 15% $ 18,900 18% $ 105,000 25% 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? 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: Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Net operating income Total Company $ 525,000 100.0% 283,500 54.0% 241,500 46.0% 117,600 22.4% 123,900 23.6% 84,000 16.0% $ 39,900 7.6% Office Chicago Minneapolis $ 105,000 100% $ 420,000 100% 31,500 30% 252,000 60% 73,500 70% 168,000 40% 54,600 52% 63,000 15% $ 18,900 18% $ 105,000 25% 2. By how much would the company's net operating income increase if Minneapolis increased its sales by $52,500 per year? Assume no change in cost behavior patterns. Net operating income increase [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: Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Net operating income Total Company $ 525,000 100.0% 283,500 54.0% 241,500 46.0% 117,600 22.4% 123,900 23.6% 84, eee 16.0% $ 39,900 7.6% Office Chicago Minneapolis $ 105,000 100% $ 420,000 100% 31,500 30% 252,000 60% 73,500 70% 168,000 40% 54,600 52% 63,eee 15% $ 18,900 18% $ 105,000 25% 3. Assume that sales in Chicago increase by $35,000 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).) Segments Total Company Chicago Minneapolis Amount % Amount % Amount %
