Raner, Harris &Chan; is a consulting firm that specializes in information system

Question

Raner, Harris &Chan; is a consulting firm that specializes in information systems for medical and dental clinics. The firm he 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 $ 862,500 100.0% s 172,500 10es $690,000 iees 414,000-_609% Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Net operating income 51,750 30 465,750 54.0% 396,750 46.0% 120, 75e 70% 276,000 40 193,200 22.4% 89,700 52% 183,500 15% 283,550 23.6% $ 31,050 i8% $ 172,500 25% 130,000 16.e% $ 65,550 7.6% equired: a. Compute the companywide break-even point in dollar sales b. Compute the break-even point for the Chicago office and for the Minneapolis office c. Is the companywide break-even point greeter than, less than, or equel to the sum of the Chicogo and Minneapolis break-even oints? Complete this question by entering your answers in the tabs below Req 1A Req 18 Rea 1C Compute the companywlde break-even point in dollar sales. (Round "CM ratio" to 2 decimal places and final answers to the nearest whole dollar amount.) Prev 2 34 of Next > search TOSHIBA

Explanation / Answer

1 Companywide break even=(193200+138000)/46%= $720000 2 Chicago office=89700/70%= $128143 Minneapolis = 103500/40%= $258750 3 Greater than

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