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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 companys most recent year is given:

Office
Total Company Chicago Minneapolis
Sales $ 525,000 100.0 % $ 105,000 100 % $ 420,000 100 %
Variable expenses 283,500 54.0 % 31,500 30 % 252,000 60 %
Contribution margin 241,500 46.0 % 73,500 70 % 168,000 40 %
Traceable fixed expenses 117,600 22.4 % 54,600 52 % 63,000 15 %
Office segment margin 123,900 23.6 % $ 18,900 18 % $ 105,000 25 %
Common fixed expenses not traceable to offices 84,000 16.0 %
Net operating income $ 39,900 7.6 %

2. By how much would the companys net operating income increase if Minneapolis increased its sales by $52,500 per year? Assume no change in cost behavior patterns.

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