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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 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 $ 487,500 100.0% 263, 250 54.0% 224,250 46.0% 109, 200 22.4% 115,050 23.6% 78,000 16.0% $ 37,050 7.6% Office Chicago Minneapolis $ 97,500 100% $ 390,000 100% 29, 250 234,000 60% 68,250 156,000 50,700 58,500 159 $ 17,550 18% $ 97,500 25% 2. By how much would the company's net operating income increase if Minneapolis increased its sales by $48,750 per year? Assume no change in cost behavior patterns. Net operating income increase
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