Question

Required information [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 Office Total Company Chicago Minneapolis $750,000 100.0% $150,000 100% Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Net operating income 405,000 54.0% 45,000 345,000 46.0% 168,000 177,000 23.6% $ 27,000 120,000 16.0% 57,000 $600,000 360.000 240,000 90,000 $150,000 100% 60% 40% 15% 25% 105,000 78,000 70% 52% 18% 22.4% 7,6% 2. By how much would the company's net operating income increase if Minneapolis increased its sales by $75,000 per year? Assume no change in cost behavior patterns Net operating income increase

Answer 1

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