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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: Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Net operating income Total Company $ 540,000 270,000 270,000 151,200 118,800 75,600 $ 43,200 100.00% 50.00% 50.00% 28.00% 22.00% 14.00% 8.00% Chicago $ 180,000 54,000 126,000 93,600 $ 32,400 Office 100.00% 30.00% 70.00% 52.00% 18.00% Minneapolis $360,000 216,000 144,000 57,600 $ 86,400 100.00% 60.00% 40.00% 16.00% 24.00% 3. Assume that sales in Chicago increase by $60,000 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 intermediate calculations and percentage answers to 1 decimal place (i.e. 0.1234 should be entered as 12.3 and other answers to the nearest whole dollar.)) Sales Variable expenses Contribution margin $ GA Total Company Amount 0 0 0 % 100.0 100.0 100.0 Amount $ 100.0 $ Chicago 240,000 72,000 168,000 168,000 % Segments Minneapolis Amount 100.0 $ 360,000 260,000 30.0 70.0 100,000 70.0 $ 100,000 % 100.0 60.0 40.0 40.0 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: Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Net operating income Total Company $ 540,000 270,000 270,000 151,200 118,800 75,600 $ 43,200 100.00% 50.00% 50.00% 28.00% 22.00% 14.00% 8.00% Chicago $ 180,000 54,000 126,000 93,600 $ 32,400 Office 100.00% 30.00% 70.00% 52.00% 18.00% Minneapolis $360,000 216,000 144,000 57,600 $ 86,400 100.00% 60.00% 40.00% 16.00% 24.00% 3. Assume that sales in Chicago increase by $60,000 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 intermediate calculations and percentage answers to 1 decimal place (i.e. 0.1234 should be entered as 12.3 and other answers to the nearest whole dollar.)) Sales Variable expenses Contribution margin $ GA Total Company Amount 0 0 0 % 100.0 100.0 100.0 Amount $ 100.0 $ Chicago 240,000 72,000 168,000 168,000 % Segments Minneapolis Amount 100.0 $ 360,000 260,000 30.0 70.0 100,000 70.0 $ 100,000 % 100.0 60.0 40.0 40.0
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Req 3 Sales Variable expenses Contribution margin Traceable fixed expenses O... View the full answer
Related Book For
Managerial Accounting
ISBN: 9781260247787
17th Edition
Authors: Ray Garrison And Eric Noreen And Peter Brewer
Posted Date:
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