Exercise 6-16 Working with a Segmented Income Statement; Break-Even Analysis (LO6-4, LO6-5) [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: office Total Company $ 862,500 100.08 54.0 Chicago $ 172,500 51,750 120,750 89,700 $ 31,050 Minneapolis $ 690,000 414,000 276,000 103, 500 $ 172,500 Sales 100 30 100 Variable expenses Contribution margin Traceable fixed expenses 465,750 60 46.08 396,750 193,200 708 40 22.4 521 154 office segnent nargin Comon fixed expenses not traceable to offices 203, 550 23.6 18 258 138,000 $65,550 16.00 Net operating income 7.61 Exercise 6-16 Part 3 . Assume that sales in Chicago increase by $57,500 next year and that sales in Minneapolis remain unchanged. Assume no change in xed costs. a. Prepare a new segmented income statement for the company. (Round your percentage answers to 1 decimal place (l.e. 0.1234 should be entered as 12.3).)

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Chapter1: Financial Statements And Business Decisions
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Exercise 6-16 Working with a Segmented Income Statement; Break-Even Analysis (LO6-4, LO6-5)
[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:
office
Total Company
$ 862,500
465,750
396,750
193,200
Chicago
$ 172,500
51,750
120,750
89,700
$ 31,050
Minneapolis
$ 690,000
414,000
276,000
103,500
$ 172,500
Sales
100.08
100
Variable expenses
Contribution margin
Traceable fixed expenses
100
608
40%
54.0N
30
46.08
70
22.48
521
15%
office segment nargin
Common fixed expenses not traceable to offices
Net operating income
203,550
23.6
18
251
138,000
$ 65,550
16.0
7.68
Exercise 6-16 Part 3
3. Assume that sales in Chicago increase by $57,500 next year and that sales in Minneapolis remain unchanged. Assume no change in
fixed costs.
a. Prepare a new segmented income statement for the company (Round your percentage answers to 1 decimal place (i.e. 0.1234
should be entered as 12.3).)
Transcribed Image Text:Exercise 6-16 Working with a Segmented Income Statement; Break-Even Analysis (LO6-4, LO6-5) [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: office Total Company $ 862,500 465,750 396,750 193,200 Chicago $ 172,500 51,750 120,750 89,700 $ 31,050 Minneapolis $ 690,000 414,000 276,000 103,500 $ 172,500 Sales 100.08 100 Variable expenses Contribution margin Traceable fixed expenses 100 608 40% 54.0N 30 46.08 70 22.48 521 15% office segment nargin Common fixed expenses not traceable to offices Net operating income 203,550 23.6 18 251 138,000 $ 65,550 16.0 7.68 Exercise 6-16 Part 3 3. Assume that sales in Chicago increase by $57,500 next year and that sales in Minneapolis remain unchanged. Assume no change in fixed costs. a. Prepare a new segmented income statement for the company (Round your percentage answers to 1 decimal place (i.e. 0.1234 should be entered as 12.3).)
a. Prepare a new segmented income statement for the company. (Round your percentage answers to 1 decimal place (i.e. 0.1234
should be entered as 12.3).)
Segments
Total Company
Chicago
Minneapolis
Amount
Amount
Amount
Sales
920,000
100.0 $
230,000
100.0 $ 690,000
100.0
Variable expenses
414,000
60.0
230,000
89,700
Contribution margin
920,000
100.0
100.0
276,000
40.0
Traceable fixed expenses
193,200
103,500
15.0
Office segment margin
726,800
100.0 $ 140,300
100.0 $
172,500
25.0
Common fixed expenses not traceable to segments
138,000
Net operating income
588,800
100.0
Transcribed Image Text:a. Prepare a new segmented income statement for the company. (Round your percentage answers to 1 decimal place (i.e. 0.1234 should be entered as 12.3).) Segments Total Company Chicago Minneapolis Amount Amount Amount Sales 920,000 100.0 $ 230,000 100.0 $ 690,000 100.0 Variable expenses 414,000 60.0 230,000 89,700 Contribution margin 920,000 100.0 100.0 276,000 40.0 Traceable fixed expenses 193,200 103,500 15.0 Office segment margin 726,800 100.0 $ 140,300 100.0 $ 172,500 25.0 Common fixed expenses not traceable to segments 138,000 Net operating income 588,800 100.0
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