Required information [The following information applies to the questions displayed below.] F 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 $ 472,500 236,250 236,250 132,300 103,950 66,150 $ 37,800 100.00% 50.00% < Prev 50.00% 28.00% 22.00% 14.00% 8.00% S 7 $ 157,500 47,250 Chicago 110,250 81,900 $ 28,350 of 7 www --- Office 100.00% 30.00% 70.00% 52.00% 18.00% Assume that sales in Chicago increase by $52,500 next year and that sales in Minneapolis remain unchanged. Assume no change Next Minneapolis $ 315,000 189,000. 126,000 50,400, $ 75,600 100.00% 60.00% 40.00% 16.00% 24.00%

Required information [The following information applies to the questions displayed below.] F 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 $ 472,500 236,250 236,250 132,300 103,950 66,150 $ 37,800 100.00% 50.00% < Prev 50.00% 28.00% 22.00% 14.00% 8.00% S 7 $ 157,500 47,250 Chicago 110,250 81,900 $ 28,350 of 7 www --- Office 100.00% 30.00% 70.00% 52.00% 18.00% Assume that sales in Chicago increase by $52,500 next year and that sales in Minneapolis remain unchanged. Assume no change Next Minneapolis $ 315,000 189,000. 126,000 50,400, $ 75,600 100.00% 60.00% 40.00% 16.00% 24.00%

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The following relates to Department no.2 of Niekut Corporation Segment contribution margin: 472,500 Profit margin controllable by segment manager 87,000 Segment profit margin 23,200 The amount that would be used to evaluate the performance of department no. 2's manager is:
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! 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 Net operating income increase $ 463,500 231,750 231,750 129,780 101,970 64,890 $ 37,080 100.00% 50.00% 50.00% 28.00% 22.00% 14.00% 8.00% Chicago $ 154,500 46,350 108,150 80, 340 $ 27,810 Office 100.00% 30.00% 70.00% 52.00% 18.00% Minneapolis $ 309,000 185,400 123,600 49,440 $ 74,160 100.00% 60.00% 40.00% 16.00% 24.00% 2. By how much would the company's net operating income increase…
Required information [The following information applies to the questions displayed below] Nation's Capital Fitness, Inc., operates a chain of fitness centers in the Washington, D.C., area. The firm's controller is accumulating data to be used in preparing its annual profit plan for the coming year. The cost behavior pattern of the firm's equipment maintenance costs must be determined. The accounting staff has suggested the use of the high-low method to develop an equation, in the form of Y=a+bX, for maintenance costs. Data regarding the maintenance hours and costs for last year are as follows: Month January February March April May June July August September October November December Total Average "Rounded Hours of Maintenance Service 530 470 260 470 360 450 330 450 470 380 360 360 4,890 408- Maintenance Costs $ 5,068 4,220 2,800 4,330 2,970 4,140 3,100 3,510 4,010 3,200 3,250 3,040 $43,638 $ 3,637 Required: 1. Using the high-low method of cost estimation, estimate the behavior of the…
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Middleton Associates is a consulting firm that specializes in information systems for construction and landscaping companies. The firm has two offices-one in Toronto and one in Vancouver. The firm classifies the direct costs of consulting jobs as variable costs. A segmented contribution format income statement for the company's most recent year is given below: Office Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Operating income Increase in operating income $ Total Company $900,000 100.0% 414,000 46.00 486,000 54.00 187,200 20.80 298,800 33.20 Required: 1. By how much would the company's operating income increase if Vancouver increased its sales by $87,000 per year? Assume no change in cost behaviour patterns. 43,500 117,000 13.00 $181,800 20.20% Toronto Vancouver $120,000 100% $780,000 100% 390,000 50 24,000 20 96,000 80 390,000 50 140,400 18 46,800 39 $ 49,200 41% $249,600 32% 2-a. Refer to…
Working with a Segmented Income Statement; Break-Even Analysis 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: Required: 1. Compute the companywide break-even point in dollar sales. Also, compute the break-even point for the Chicago office and for the Minneapolis office. Is the companywide break-even point greater than, less than, or equal to the sum of the Chicago and Minneapolis break-even points? Why? 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. 3. Refer to the original data. Assume that sales in Chicago increase by 550,000 next year and that sales in Minneapolis remain…
Required information [The following information applies to the questions displayed below.] Arctica manufactures snowmobiles and ATVS. These products are made in different departments, and each department has its own manager. Each responsibility performance report includes only those costs that the department manager can control: direct materials, direct labor, supplies used, and utilities. Budget For Year Ended December 31 Direct materials Direct labor Totals Department manager salaries Supplies used Utilities Rent Totals Snowmobile $ 19,810 10,700 ▸ 4,600 3,630 Controllable Costs Responsibility Accounting Performance Report Manager, Snowmobile Department For Year Ended December 31 Budgeted $ 390 6,000 $ 45,130 Prepare a responsibility accounting performance report for the snowmobile department. Note: Under budget amounts should be indicated by a minus sign. 0 $ ATV $ 27,800 20,800 5,500 Actual 930 570 6,600 $ 62,200 Actual Snowmobile $ 19,720 10,990 4,700 3,470 360 5,600 $ 44,840 Over…
Raner, Harris and Chan is a consulting firm specializing in information systems for medical and dental clinics. The firm has two offices—one in Chicago and one in Minneapolis. It 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 Office Chicago Minneapolis Sales $ 468,000 100.00% $ 156,000 100.00% $ 312,000 100.00% Variable expenses 234,000 50.00% 46,800 30.00% 187,200 60.00% Contribution margin 234,000 50.00% 109,200 70.00% 124,800 40.00% Traceable fixed expenses 131,040 28.00% 81,120 52.00% 49,920 16.00% Office segment margin 102,960 22.00% $ 28,080 18.00% $ 74,880 24.00% Common fixed expenses not traceable to offices 65,520 14.00% Net operating income $ 37,440 8.00% Exercise 6-17 (Algo) Working with a Segmented Income Statement [LO6-4] Assume Minneapolis’s sales by major market are: Minneapolis Market…