Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Required information [The following information applies to the questions displayed below.) Raner, Harris & Chan is a consulting firm that specializes in information systems for

image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
image text in transcribed
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 Conmon fixed expenses not traceable to offices Net operating income Total Company $ 712,500 100.0 384,750 54.0% 327,750 46.09 159,600 22.44 168, 150 23.64 114,000 16.04 $ 54,150 7.6% Office Chicago Minneapolis $ 142,500 100 $570,000 100% 42,750 30% 342,000 60% 99,750 709 228,000 404 74,100 52% 85,500 15% $ 25,650 184 $ 142,500 25 Req 1A Reg 1B Req 1C compute the companywide break-even point in dollar sales. (Round "CM ratio" to 2 decimal plages and final answers to the nearest whole dollar amount.) Break-even point in dollar sales Reg 1A Reg LB Reg 10 Compute the break-even point for the Chicago office and for the Minneapolis office. (Round "CM ratio" to 2 decimal places and final answers to the nearest whole dollar amount.) Break-even Point Chicago office Minneapolis office Reg 1A Reg 1B Reg 10 Is the companywide break-even point greater than, less than or equal to the sum of the Chicago and Minneapolis break-even points? Greater than Less than Equal to 2. By how much would the company's net operating income increase if Minneapolis increased its sales by $71,250 per year? Assume no change in cost behavior patterns. Net operating income increase 3. Assume that sales in Chicago increase by $47,500 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 Amount % Chicago Amount Minneapolis Amount % % 0 0.0 0 0.0 0 0.0 0 0.01 $ 0 0.0 $ 0 0.0 $ 0 0.01

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Commercial Energy Auditing Reference Handbook

Authors: Steve Doty

2nd Edition

1439851972, 978-1439851975

More Books

Students also viewed these Accounting questions