[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 $ 450,000 225,000 225,000 126,000 99,000 63,000 $ 36,000 100% 50% 50% 28% 22% 14% 8% Chicago $ 150,000 45,000 105,000 78,000 $ 27,000 Office 100% 30% 70% 52% 18% Minneapolis $ 300,000 180,000 120,000 48,000 $72,000 100% 60% 40% 16% 24% Assume that sales in Chicago increase by $50,000 next year and that sales in Minneapolis remain unchanged. Assume no cha fixed costs. Prepare a new segmented income statement for the company. (Round your percentage answers to 1 decimal place (i.e. 0.123
[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 $ 450,000 225,000 225,000 126,000 99,000 63,000 $ 36,000 100% 50% 50% 28% 22% 14% 8% Chicago $ 150,000 45,000 105,000 78,000 $ 27,000 Office 100% 30% 70% 52% 18% Minneapolis $ 300,000 180,000 120,000 48,000 $72,000 100% 60% 40% 16% 24% Assume that sales in Chicago increase by $50,000 next year and that sales in Minneapolis remain unchanged. Assume no cha fixed costs. Prepare a new segmented income statement for the company. (Round your percentage answers to 1 decimal place (i.e. 0.123
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![[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
$ 450,000
225,000
225,000
126,000
99,000
63,000
$36,000
100%
50%
50%
28%
22%
14%
8%
Chicago
$ 150,000
45,000
105,000
78,000
$ 27,000
Office
100%
30%
70%
52%
18%
Minneapolis
$ 300,000
180,000
120,000
48,000
$ 72,000
100%
60%
40%
16%
24%
3. Assume that sales in Chicago increase by $50,000 next year and that sales in Minneapolis remain unchanged. Assume no change
in fixed costs.
a. Prepare a new segmented income statement for the company. (Round your percentage answers to 1 decimal place (i.e. 0.1234
should be entered as 12.3).)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F451d09d4-b434-4cb5-a7e7-42a4aaf26bd0%2F7f2790e6-cf50-4687-a866-c9dae717ab5e%2Fgke14b_processed.jpeg&w=3840&q=75)
Transcribed Image Text:[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
$ 450,000
225,000
225,000
126,000
99,000
63,000
$36,000
100%
50%
50%
28%
22%
14%
8%
Chicago
$ 150,000
45,000
105,000
78,000
$ 27,000
Office
100%
30%
70%
52%
18%
Minneapolis
$ 300,000
180,000
120,000
48,000
$ 72,000
100%
60%
40%
16%
24%
3. Assume that sales in Chicago increase by $50,000 next year and that sales in Minneapolis remain unchanged. Assume no change
in fixed costs.
a. Prepare a new segmented income statement for the company. (Round your percentage answers to 1 decimal place (i.e. 0.1234
should be entered as 12.3).)
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