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Required information [The following information applies to the questions displayed belowj Raner, Harris & Chan is a consulting firm that specializes in information systems for
Required information [The following information applies to the questions displayed belowj 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 Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Net operating income $1,125,000 100.0% $225,000 100% $900,000 100% 67,500 50.6- 607,500 54.0% 517,500 46.0% 252,000 22.4% 265,500 23.6% $ 40,500 18% $225,000 25% 180,000 16.0% 540,000 0_ 360,000 135,000 , 157,500 117,000 70% 52% 40% 15% 85,500 7.6% 2. By how much would the company's net operating income increase if Minneapolis increased its sales by $112,500 per year? Assume no change in cost behavior patterns Net operating income increase
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