Required information The following information applies to the questions displaye

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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 i given: 698,89 1008 -414,000 60% 276,000 40% 52% 103,500 15% 862,580 180. 172,500 Variable expenses Contribution margitn Traceable fixed expenses Office segeent margin Common Fixed expenses not traceable to offices Net operating incone 51,250 30 465,750 396, 7se 54.0% 46.0% 89, 700 18% $ 172,see 25 293,sse 23.6% $ 31,050 138,000 16.0% s 65,550 7.6% 3. Assume that sales in Chicego increase by $57,500 next year and that sales in Minneapolis remain unchanged. Assume no change fixed costs a Prepare a new segmented income statement for the company. (Round your percentage answers to 1 decimal place fie 1234 should be entered as 12.3)

Explanation / Answer

Total company Chicago Minneapolis Sales 920000 100.0% 230000 100% 690000 100% Variable expenses 483000 52.5% 69000 30% 414000 60% Contribution margin 437000 47.5% 161000 70% 276000 40% Traceable fixed expenses 193200 21.0% 89700 39% 103500 15% Office segment margin 243800 26.5% 71300 31% 172500 25% Common fixed expenses not traceable 138000 Net operating income 105800

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