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

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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
Sales
Variable expenses
Contribution margin
Traceable fixed expenses
100.00%
50.00%
50.00%
Chicago
$ 171,000
51, 300
119, 700
88,920
Minneapolis
100.00%
60.00
40.00%
16.00%
$ 342,000
100.00%
30.00%
70.00%
52.00%
256, 500
205, 200
136,800
54,720
$ 82,080
256, 500
143,640
28.00%
Office segment margin
$ 30,780
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
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Transcribed Image Text: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 Sales Variable expenses Contribution margin Traceable fixed expenses 100.00% 50.00% 50.00% Chicago $ 171,000 51, 300 119, 700 88,920 Minneapolis 100.00% 60.00 40.00% 16.00% $ 342,000 100.00% 30.00% 70.00% 52.00% 256, 500 205, 200 136,800 54,720 $ 82,080 256, 500 143,640 28.00% Office segment margin $ 30,780 112,860 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 < Prev est ehere to search logi
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