Required information [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 Sales Variable expenses Contribution margin Traceable fixed expenses office segment margin Common fixed expenses not traceable to offices Net operating Income Total Company $ 477,000 100 238,500 504 238,500 50 133,560 284 104,940 22% 66,780 144 $38,160 IN Office Chicago $ 159,000 100 47,700 30% 111,300 70% 82,680 524 30% $ 20,620 Total Company 3. Assume that sales in Chicago increase by $53,000 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 intermediate calculations and percentage answers to 1 decimal place (ie. 0.1234 should be entered as 12.3 and other answers to the nearest whole dollar)) Chicago Minneapolis $318,000 100% 190,800 60% 127,200 40% 50,880 16% 24% $ 76,320 Segments Minneapolis
Required information [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 Sales Variable expenses Contribution margin Traceable fixed expenses office segment margin Common fixed expenses not traceable to offices Net operating Income Total Company $ 477,000 100 238,500 504 238,500 50 133,560 284 104,940 22% 66,780 144 $38,160 IN Office Chicago $ 159,000 100 47,700 30% 111,300 70% 82,680 524 30% $ 20,620 Total Company 3. Assume that sales in Chicago increase by $53,000 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 intermediate calculations and percentage answers to 1 decimal place (ie. 0.1234 should be entered as 12.3 and other answers to the nearest whole dollar)) Chicago Minneapolis $318,000 100% 190,800 60% 127,200 40% 50,880 16% 24% $ 76,320 Segments Minneapolis
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Required information
[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
Sales
Variable expenses
Contribution margin
Traceable fixed expenses
office segment margin.
Common fixed expenses not traceable to offices
Net operating income
Total Company
$ 477,000
Chicago
100% $ 159,000
238,500 50%
238,500 50
133,560 28%
104,940 22%
66,780 14%
$ 38,160 84
Total Company
L
Office
100%
47,700 30%
111,300 70%
82,680 52%
$28,620 10%
3. Assume that sales in Chicago increase by $53,000 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 intermediate calculations and percentage answers to
1 decimal place (ie. 0.1234 should be entered as 12.3 and other answers to the nearest whole dollar.))
Chicago
Minneapolis
5318,000 100%
190,800 60%
127,200 40%
50,880 16%
$ 76,320 24%
Segments
Minneapolis
Amerist
Transcribed Image Text:office segment margin
Common fixed expenses not traceable to offices
Net operating income
Sales
Variable expenses
Contribution margin
Traceable fixed expenses
Office segment margin
Common fixed expenses not traceable to segments
Net operating income
3. Assume that sales in Chicago increase by $53,000 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 intermediate calculations and percentage answers to
1 decimal place (i.e. 0.1234 should be entered as 12.3 and other answers to the nearest whole dollar.))
Amount
$
Total Company
$
104,948 22%
66,780 14%
$ 38,160 84
530,000
254,400
275,600
133,560
142,040
142,040
>.20,020
Amount
100.0 $ 212.000
63,600
148,400
82,680
100.0 $ 65,720
100.0
100.0
Chicago
109
%
Segments
> /0,320 245
30.0
70.0
Amount
100.0 $318,000
18.0 $
Minneapolis
190,800
127.200
50,880
76,320
%
100.0
60.0
40.0
16.0
24.0
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