Raner, Harris & Chan is a consulting firm that specializes in information systems for medical and...

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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 Chicago Minneapolis $ 420,000 100% Sales 252,000 60% Variable expenses Contribution margin $ 525,000 100.0% $ 105,000 283,500 54.0% 241,500 46.0% 117,600 22.4% 23.6% 31,500 73,500 168,000 40% Traceable fixed expenses 54,600 63,000 15% 123,900 $ 18,900 $ 105,000 Office segment margin 25% Common fixed expenses not traceable to offices 84,000 16.0% Net operating income $ 39,900 7.6 % 100% 30% 70% 52% 18% 2. By how much would the company's net operating income increase if Minneapolis increased its sales by $52,500 per year? Assume no change in cost behavior patterns. 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 Chicago Minneapolis $ 420,000 100% Sales 252,000 60% Variable expenses Contribution margin $ 525,000 100.0% $ 105,000 283,500 54.0% 241,500 46.0% 117,600 22.4% 23.6% 31,500 73,500 168,000 40% Traceable fixed expenses 54,600 63,000 15% 123,900 $ 18,900 $ 105,000 Office segment margin 25% Common fixed expenses not traceable to offices 84,000 16.0% Net operating income $ 39,900 7.6 % 100% 30% 70% 52% 18% 2. By how much would the company's net operating income increase if Minneapolis increased its sales by $52,500 per year? Assume no change in cost behavior patterns.

Answer rating: 100% (QA)

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