! Required information SB Exercise 6-16 through Exercise 6-17 (Algo) (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 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 $ 486,000 100% 249,000 508 237,000 50% 130, 800 28% 106,200 228 69,000 148 $ 37,200 88 Office Chicago Minneapolis $ 168,000 100% $ 318,000 18 57,000 30% 190,800 60% 111,000 70% 127,200 40% 80,400 528 50,880 16% 30, 600 188 $ 76, 320 248 Exercise 6-16 Part 1 (Algo) Working with a Segmented Income Statement; Break-Even Analysis (LO6-4, LO6-5] Required information Required: 1-a. Compute the companywide break-even point in dollar sales. 1-b. Compute the break-even point for the Chicago office and for the Minneapolis office. 1-c. Is the companywide break-even point greater than, less than, or equal to the sum of the Chicago and Minneapolis break-even points? Complete this question by entering your answers in the tabs below. Show less A Reg 1A Reg 1B Req 1C Compute the companywide break-even point in dollar sales. (Round "CM ratio" to 2 decimal places and final answer to the nearest whole number.) Break-even point in dollar sales Prey 1 2 3 of 4 Next > Iniyo) VINY V I. LLU VIII Juu IRIURILEVILun.IIIuryJIJI Required information Required: 1-a. Compute the companywide break-even point in dollar sales. 1-b. Compute the break-even point for the Chicago office and for the Minneapolis office. 1-c. Is the companywide break-even point greater than, less than or equal to the sum of the Chicago and Minneapolis break-even points? Complete this question by entering your answers in the tabs below. Show less A Req 1A Reg 1B Req 1C Compute the break-even point for the Chicago office and for the Minneapolis office. (Round "CM ratio" to 2 decimal places and final answer to the nearest whole number.) Break-even Point Chicago office Minneapolis office $ 127,200 Sales Variable expenses Contribution margin Traceable fixed expenses office segment margin Common fixed expenses not traceable to offices Net operating income Total Company $ 486,000 1008 249,000 508 237,000 508 130,800 288 106,200 22% 69,000 14% $ 37,200 8% Chicago $ 168,000 1008 57,000 308 111,000 70% 80,400 528 $ 30,600 18% Minneapolis $ 318,000 18 190,800 608 127,200 408 50,880 168 $ 76,320 24% Exercise 6-16 Part 2 (Algo) Working with a Segmented Income Statement; Break-Even Analysis (LO6-4, LO6-5] 2. By how much would the company's net operating income increase if Minneapolis increased its sales by $81,000 per year? Assume no change in cost behavior patterns. Net operating income increase Exercise 6-17 (Algo) Working with a Segmented Income Statement (LO6-4] Assume that Minneapolis' sales by major market are: Sales Variable expenses Contribution margin Traceable fixed expenses Market segment margin Common fixed expenses not traceable to markets office segment margin 52% Market Medical Dental $ 224,000 100% $ 124,000 100% 134,000 58,000 90,000 36% 66,000 14,400 68 27,000 21% 75,600 30% $ 39,000 27% Minneapolis $ 318,000 100% 190,800 60% 127,200 40% 50,880 16% 76,320 24% 15,000 $ 61,320 19% The company would like to initiate an intensive advertising campaign in one of the two market segments during the next month. The campaign would cost $11,000. Marketing studies indicate that such a campaign would increase sales in the Medical market by $52,000 or increase sales in the Dental market by $53,000. Required: 1. How much would the company's profits increase (decrease) if it implemented the advertising campaign in the Medical Market? 2. How much would the company's profits increase (decrease) if it implemented the advertising campaign in the Dental Market? 3. In which of the markets would you recommend that the company focus its advertising campaign? Required information The company would like to initiate an intensive advertising campaign in one of the two market segments during the next month. The campaign would cost $11,000. Marketing studies indicate that such a campaign would increase sales in the Medical market by $52,000 or increase sales in the Dental market by $53,000. Required: 1. How much would the company's profits increase (decrease) if it implemented the advertising campaign in the Medical Market? 2. How much would the company's profits increase (decrease) if it implemented the advertising campaign in the Dental Market? 3. In which of the markets would you recommend that the company focus its advertising campaign? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 How much would the company's profits increase (decrease) if it implemented the advertising campaign in the Medical Market? Company's profits by Required information The company would like to initiate an intensive advertising campaign in one of the two market segments during the next month. The campaign would cost $11,000. Marketing studies indicate that such a campaign would increase sales in the Medical market by $52,000 or increase sales in the Dental market by $53,000. Required: 1. How much would the company's profits increase (decrease) if it implemented the advertising campaign in the Medical Market? 2. How much would the company's profits increase (decrease) if it implemented the advertising campaign in the Dental Market? 3. In which of the markets would you recommend that the company focus its advertising campaign? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 How much would the company's profits increase (decrease) if it implemented the advertising campaign in the Dental Market? Company's profits by Required information The company would like to initiate an intensive advertising campaign in one of the two market segments during the next month. The campaign would cost $11,000. Marketing studies indicate that such a campaign would increase sales in the Medical market by $52,000 or increase sales in the Dental market by $53,000. Required: 1. How much would the company's profits increase (decrease) if it implemented the advertising campaign in the Medical Market? 2. How much would the company's profits increase (decrease) if it implemented the advertising campaign in the Dental Market? 3. In which of the markets would you recommend that the company focus its advertising campaign? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 In which of the markets would you recommend that the company focus its advertising campaign? Medical Dental