Required information [The following information applies to the questions displayed below.] 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: Office Total Company $ 513,000 256, 500 256, 500 143,640 Chicago $ 171,000 51,300 119,700 88,920 $ 30,780 Minneapolis $ 342,000 205, 200 136,800 54,720 $ 82,060 Sales 100.00% 100.ee% 30.00% 70.00% 52.00% 100.00% Variable expenses Contribution margin Traceable fixed expenses 5e.e0x 5e.00% 60.00 40.00 28.00% 16.00 Office segment margin 112,860 22.00% 18.00% 24.00% Common fixed expenses not traceable to offices 71,820 $ 41,040 14.00% Net operating income 8.00% 2. By how much would the company's net operating income increase if Minneapolis increased its sales by $85.500 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 & 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: Office Total Company $ 513,000 256, 500 256, 500 143,640 Chicago $ 171,000 51,300 119,700 88,920 $ 30,780 Minneapolis $ 342,000 205, 200 136,800 54,720 $ 82,060 Sales 100.00% 100.ee% 30.00% 70.00% 52.00% 100.00% Variable expenses Contribution margin Traceable fixed expenses 5e.e0x 5e.00% 60.00 40.00 28.00% 16.00 Office segment margin 112,860 22.00% 18.00% 24.00% Common fixed expenses not traceable to offices 71,820 $ 41,040 14.00% Net operating income 8.00% 2. By how much would the company's net operating income increase if Minneapolis increased its sales by $85.500 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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