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 $ 513,000 256,500 256,500 143,640 112,860 71,820 $ 41,040 100.00% 50.00% 50.00% 28.00% 22.00% 14.00% 8.00% Chicago $ 171,000 51,300 119,700 88,920 $ 30,780 Office 100.00% 30.00% 70.00% 52.00% 18.00% Minneapolis $ 342,000 205, 200 136,800 54,720 $82,080 100.00% 60.00% 40.00% 16.00% 24.00% Required: 1-a. Compute the companywide break-even point in dollar sales. 1-b. Compute the break-even point for the Chicago office and for the Minneapolis office. 1-c. Is the companywide break-even point greater than, less than, or equal to the sum of the Chicago and Minneapolis break-even points?
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 $ 513,000 256,500 256,500 143,640 112,860 71,820 $ 41,040 100.00% 50.00% 50.00% 28.00% 22.00% 14.00% 8.00% Chicago $ 171,000 51,300 119,700 88,920 $ 30,780 Office 100.00% 30.00% 70.00% 52.00% 18.00% Minneapolis $ 342,000 205, 200 136,800 54,720 $82,080 100.00% 60.00% 40.00% 16.00% 24.00% Required: 1-a. Compute the companywide break-even point in dollar sales. 1-b. Compute the break-even point for the Chicago office and for the Minneapolis office. 1-c. Is the companywide break-even point greater than, less than, or equal to the sum of the Chicago and Minneapolis break-even points?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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
$ 513,000
256,500
256,500
143,640
112,860
71,820
$ 41,040
100.00%
50.00%
50.00%
28.00%
22.00%
14.00%
8.00%
Chicago
$ 171,000
51,300
119,700
88,920
$ 30,780
Office
100.00%
30.00%
70.00%
52.00%
18.00%
Minneapolis
$ 342,000
205, 200
136,800
54,720
$ 82,080
100.00%
60.00%
40.00%
16.00%
24.00%
Required:
1-a. Compute the companywide break-even point in dollar sales.
1-b. Compute the break-even point for the Chicago office and for the Minneapolis office.
1-c. Is the companywide break-even point greater than, less than, or equal to the sum of the Chicago and Minneapolis break-even
points?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fcf06c006-4a3b-42c3-9134-70605fd7beff%2F308abbe2-c6a3-4c8a-9c5a-ea9531f8139a%2F7jc9h9a_processed.png&w=3840&q=75)
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
$ 513,000
256,500
256,500
143,640
112,860
71,820
$ 41,040
100.00%
50.00%
50.00%
28.00%
22.00%
14.00%
8.00%
Chicago
$ 171,000
51,300
119,700
88,920
$ 30,780
Office
100.00%
30.00%
70.00%
52.00%
18.00%
Minneapolis
$ 342,000
205, 200
136,800
54,720
$ 82,080
100.00%
60.00%
40.00%
16.00%
24.00%
Required:
1-a. Compute the companywide break-even point in dollar sales.
1-b. Compute the break-even point for the Chicago office and for the Minneapolis office.
1-c. Is the companywide break-even point greater than, less than, or equal to the sum of the Chicago and Minneapolis break-even
points?
Transcribed Image Text:Req 1A
Req 1A
Compute the companywide break-even point in dollar sales. (Round your final answer to the nearest whole number.)
Break-even point in dollar sales
Req 1B
Chicago office
Minneapolis office
Req 1B.
OGreater than
OLess than
OEqual to
Compute the break-even point for the Chicago office and for the Minneapolis office. (Round your final answer to the nearest
whole number.)
Req 1C
Req 1C
Break-even
Point
Req 1A
Is the companywide break-even point greater than, less than, or equal to the sum of the Chicago and Minneapolis break-even
points?
Req 1B
Req 1C
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