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SB Exercise 6-16 through Exercise 6-17 (Algo) (The following information applies to the questions displayed below.) Raner, Harris & Chan is a consulting firm that
SB Exercise 6-16 through Exercise 6-17 (Algo) (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 $ 490,000 100% 243,000 50% 247,000 50% 139,600 28% 107,400 22% 68,600 14% $ 38,800 8% Office Chicago Minneapolis $ 170,000 100% $ 320,000 100% 51,000 30% 192,000 60% 119,000 70% 128,000 40% 88,400 52% 51,200 16% $ 30,600 18% $ 76,800 24% Exercise 6-16 Part 2 (Algo) Working with a Segmented Income Statement; Break-Even Analysis (LO6-4, LO6-5] 2. By how much would the company's net operating income increase if Minneapolis increased its sales by $85,000 per year? Assume no change in cost behavior patterns. Net operating income increase
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