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 office Total Company $ 508,500 100% 254,250 50% 254,250 50% 142,380 28% 111,870 22% 71,190 14% $ 40,680 Chicago $ 169,500 100% Minneapolis $339,000 100% 50,850 30% 203,400 60% 118,650 786 135,600 40% 88,140 52% 54,240 16% $ 30,510 18% $ 81,360 24% 8% 2. By how much would the company's net operating Income Increase If Minneapolis Increased its sales by $84,750 per year? Assume no change in cost behavior patterns. Net operating income increase
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 office Total Company $ 508,500 100% 254,250 50% 254,250 50% 142,380 28% 111,870 22% 71,190 14% $ 40,680 Chicago $ 169,500 100% Minneapolis $339,000 100% 50,850 30% 203,400 60% 118,650 786 135,600 40% 88,140 52% 54,240 16% $ 30,510 18% $ 81,360 24% 8% 2. By how much would the company's net operating Income Increase If Minneapolis Increased its sales by $84,750 per year? Assume no change in cost behavior patterns. Net operating income increase
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
office
Total Company
Chicago
$ 588,500
254,250 50%
100%
$ 169,500
50,850 30%
100%
Minneapolis
$ 339,000
100%
203,400 68%
254,250 50%
118,650 78%
135,600 48%
142,380 28%
88,140 52%
54,240 16%
$ 40,680
111,870 22%
71,190 14%
8%
$ 30,510
18%
$ 81,360
24%
2. By how much would the company's net operating Income Increase If Minneapolis Increased its sales by $84,750 per year? Assume
no change in cost behavior patterns.
Net operating income increase](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6049f46d-1f07-42ff-9841-b048ac4d90c9%2F35dabe47-533b-4ac6-91af-80b923189b87%2F0jlvu8s_processed.jpeg&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
office
Total Company
Chicago
$ 588,500
254,250 50%
100%
$ 169,500
50,850 30%
100%
Minneapolis
$ 339,000
100%
203,400 68%
254,250 50%
118,650 78%
135,600 48%
142,380 28%
88,140 52%
54,240 16%
$ 40,680
111,870 22%
71,190 14%
8%
$ 30,510
18%
$ 81,360
24%
2. By how much would the company's net operating Income Increase If Minneapolis Increased its sales by $84,750 per year? Assume
no change in cost behavior patterns.
Net operating income increase
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