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 | |||||||||||||||
Sales | $ | 1,125,000 | 100.0 | % | $ | 225,000 | 100 | % | $ | 900,000 | 100 | % | |||||
Variable expenses | 607,500 | 54.0 | % | 67,500 | 30 | % | 540,000 | 60 | % | ||||||||
Contribution margin | 517,500 | 46.0 | % | 157,500 | 70 | % | 360,000 | 40 | % | ||||||||
Traceable fixed expenses | 252,000 | 22.4 | % | 117,000 | 52 | % | 135,000 | 15 | % | ||||||||
Office segment margin | 265,500 | 23.6 | % | $ | 40,500 | 18 | % | $ | 225,000 | 25 | % | ||||||
Common fixed expenses not traceable to offices | 180,000 | 16.0 | % | ||||||||||||||
Net operating income | $ | 85,500 | 7.6 | % | |||||||||||||
3. Assume that sales in Chicago increase by $75,000 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 percentage answers to 1 decimal place (i.e. 0.1234 should be entered as 12.3).)
Sales |
Variable expenses |
Contribution margin |
Traceable fixed expenses |
Office segment margin |
Common fixed expenses not traceable to segments |
Net operating income |
Total | Chicago | Minneapolis | |||||
Amount | % | Amount | % | Amount | % | ||
Sales | 1200000 | 100% | 300000 | 100% | 900000 | 100% | |
Variable cost | 630000 | 55% | 90000 | 30% | 540000 | 60% | |
Contribution margin | 570000 | 45% | 210000 | 70% | 360000 | 40% | |
Traceable fixed cost | 252000 | 21% | 117000 | 39% | 135000 | 15% | |
Office segment margin | 318000 | 24% | 93000 | 31% | 225000 | 25% | |
Common Fixed cost | 180000 | 15% | |||||
Net income | 138000 | 9% | |||||
Raner, Harris & Chan is a consulting firm that specializes in information systems for medical and...
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 Sales $ 712,500 100.0 % $ 142,500 100 % $ 570,000 100 % Variable expenses 384,750 54.0 % 42,750 30...
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 Sales $ 412,500 100.0 % $ 82,500 100 % $ 330,000 100 % Variable expenses 222,750 54.0 % 24,750 30...
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 Sales $ 1,050,000 100.0 % $ 210,000 100 % $ 840,000 100 % Variable expenses 567,000 54.0 % 63,000 30...
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 Sales $ 1,087,500 100.0 % $ 217,500 100 % $ 870,000 100 % Variable expenses 587,250 54.0 % 65,250 30...
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 Sales $ 637,500 100.0 % $ 127,500 100 % $ 510,000 100 % Variable expenses 344,250 54.0 % 38,250 30...
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 Sales $ 1,050,000 100.0 % $ 210,000 100 % $ 840,000 100 % Variable expenses 567,000 54.0 % 63,000 30...
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 Sales $ 637,500 100.0 % $ 127,500 100 % $ 510,000 100 % Variable expenses 344,250 54.0 % 38,250 30...
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 Sales $ 412,500 100.0 % $ 82,500 100 % $ 330,000 100 % Variable expenses 222,750 54.0 % 24,750 30...
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 $1,212,500 100.0% 546,250 54.0 les 5810,000 lees 202, see 6e, 75e Sales Variable expenses Contribution margin Teaceable fixed expenses office segment margin...
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 Sales $ 1,050,000 100.0 % $ 210,000 100 % $ 840,000 100 % Variable expenses 567,000 54.0 % 63,000 30...