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Raner, Harris and 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 $ 513,000 Chicago 100% $ 171,000 256,500 50% 256,500 50% 143,640 28% 112,860 22% 71,820 14% $ 41,040 8% Office 100% 30% 51,300 119,700 70% 88,920 52% $ 30,780 18% Minneapolis $ 342,000 100% 205,200 60% 136,800 48% 54,720 16% 24% $ 82,080 3. Assume that sales in Chicago increase by $57,000 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.)) Raner, Harris and 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 $ 513,000 Chicago 100% $ 171,000 256,500 50% 256,500 50% 143,640 28% 112,860 22% 71,820 14% $ 41,040 8% Office 100% 30% 51,300 119,700 70% 88,920 52% $ 30,780 18% Minneapolis $ 342,000 100% 205,200 60% 136,800 48% 54,720 16% 24% $ 82,080 3. Assume that sales in Chicago increase by $57,000 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.))
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Based on the information provided in the image and the assumptions provided in the question lets prepare a new segmented income statement First lets i... View the full answer
Related Book For
Managerial Accounting
ISBN: 9781260247787
17th Edition
Authors: Ray Garrison, Eric Noreen, Peter Brewer
Posted Date:
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