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SB Exercise 6-16 through Exercise 6-17 (Static) [The following information applies to the questions displayed below.] Raner, Harris and Chan is a consulting firm
SB Exercise 6-16 through Exercise 6-17 (Static) [The following information applies to the questions displayed below.] Raner, Harris and 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 $ 450,000 100% $ 150,000 100% $ 300,000 100% Variable expenses 225,000 50% 45,000 30% 180,000 60% Contribution margin 225,000 50% 105,000 70% 120,000 40% Traceable fixed expenses 126,000 28% 78,000 528 48,000 16% Office segment margin 99,000 22% $ 27,000 18% $ 72,000 24% Common fixed expenses not traceable to offices 63,000 14% Net operating income $ 36,000 8% Exercise 6-16 Part 2 (Static) 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 $75,000 per year? Assume no change in cost behavior patterns. Net operating income increase
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