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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