Question

The folowing informanon apelies to the questions displeyed below aner Harris, & Chan is a consulting fim that specializes in information systems for medical and dental cinics. The fim has two offices-one in Chicago and one in Minneapolis. The frm classifies the direct costs of format year is given below 414000 60 120750 70% 276000 40% 15% fixed expenses 193200 224 % 89700 52% 203550 236 % S 31,050 18% S02.500 25% txed expenses

Answer 1

segments Total Company Chicago Minneapolis Sale Variabel Expenses Contribution Margin Traceable Fixed Expenses Market SegmentedMargin common Fixed Cost Net operating Income 862500 100.0% 172500 465750 54.0% 51750 396750, 46.0% 120750 193200 203550, 138000 16.0% 100%690000 30% 414000 70% 276000 52%103500 1890.172500 100% 60% 40% 15% 25% , 22.4% 23.6% 89700 31050 65550 7.6% If Minneapolis Sales Increased by $86,250 Total Sales of Minneapolis is $690,000+ $86250 776250 Minneapolis Varaible Cost: 776250.60 465750 segments Total Company Chicago Minneapolis Sale Variabel Expenses Contribution Margin 948750 100.0% 172500 100.0% 776250 517500 54.5% 51750 30.0% 465750 431250 45.5% 120750 70.0% 310500 193200 23131150 138000 14.5% 100050 10.5% 100.0% 60.0% 40.0% 13.3% 26.7% 20.4%,89700 25..1%' 3105() Traceable Fixed Expenses 52.090103500 18.11% 207000 Marksi.Sayousxtied Mary in common Fixed Cost Net operating Income Answer: Increse bv Net operating income - [S 100050-65550)$34500

If Chicago Sales Increased by $57500 Total Sales of Chicago is = $57,500+$172500 =$ 230,000 Chicago Varaible Cost: 230000*.30 69,000 segments Chicago Total Company Amount Minneapolis % Amount % Amount Sale Variabel Expenses Contribution Margirn Traceable Fixed Expenses Market Segmented Margin common Fixed Cost Net operating Income 920000 100.0% 230000 100.0% 690000 483000 52.5% 69000 30.0% 414000 437000 47.5% 161000 70.0% 276000 89700 71300 193200 243800 138000 15.0% 105800 11.5% 85.2% 51.1% 34.1% 12.8% 21.3% 21.0% 26.5% 39.0% 31.0% 103500 172500