Required information The following information applies to the questions displaye

Question

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 companys most recent year is given: Minneapolis $1,050,000 100.0% $210,000 1008 $840,000 100 Total Company Chicago Sales Variable expenses Contribution margin Traceable fixed expenses office segment margin Common fixed expenses not traceable to offices Net operating income 567,000 54.0 63,000 301 504,000 60 483,000 46.0 147,000 708 336,000 40 235,200 22.4% 109,200 52% 126,000 15% 247,800 168,000 16.0 23.6%-37,800. :184 $ .251 $ 79,800 7.68 3. Assume that sales in Chicago increase by $70,000 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)) Segments Total Company Chicago Minneapolis Sales 0.0 0.0 0.0 Contribution margin Traceable fixed expenses Office segment margin Common flixed expenses to s 0.0 0 0.0 $ 0.0 Net operating income 0.0

Explanation / Answer

Segements Total Company Chicago Minneapolis Amount % Amount % Amount %   Sales ######## 100.0% 280000 100.0% $840,000 100.0%   Variable expenses $588,000 52.5% 84,000 30.0% 504,000 60.0%   Contribution margin $532,000 47.5% 196,000 70.0% 336,000 40.0%   Traceable fixed expenses $235,200 21.0% 109,200 39.0% 126,000 15.0%   Office segment margin $296,800 26.5% $86,800 31.0% $210,000 25.0%   Common fixed expenses not traceable 168,000 15.0%   Net operating income $128,800 11.5%

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