Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribedimage text in transcribed

[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 company's most recent year is given below: Total Company $ 1,050,000 100.0% 567,000 54.0% Office Chicago Minneapolis $ 210,000 100% $ 840,000 100% 63,000 30% 504,000 60% Sales Variable expenses Contribution margin Traceable fixed expenses 483,000 235,200 46.0% 22.4% 147,000 109,200 70% 52% 336,000 126,000 40% 15% Office segment margin 247,800 23.6% $ 37,800 18% $ 210,000 25% Common fixed expenses not traceable to offices 168,000 16.0% Net operating income $ 79,800 7.6% Required: 1-a. Compute the companywide break-even point in dollar sales. (Round "CM ratio" to 2 decimal places and final answer to the nearest whole dollar amount.) Break-even point in dollar sales 1-b. 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 1-c. 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

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

Step: 3

blur-text-image

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

Monthly Bank Reconciliation Statement Log

Authors: Elizabeth S.R.M. Cole

1st Edition

1541036824, 978-1541036826

More Books

Students also viewed these Accounting questions

Question

How can a firm suppress problem recognition?

Answered: 1 week ago