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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?

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?

FINANCIAL ACCOUNTING
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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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: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?
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
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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