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: Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Net operating income Total Company $ 900,000 100.0% 486,000 54.0% 414,000 46.0% 201,600 22.4% 212,400 23.6% 144,000 16.0% $ 68,400 7.6% Office Chicago Minneapolis $ 180,000 100% $ 720,000 100% 54,000 30% 432,000 60% 126,000 70% 288,000 40% 93,600 52% 108,000 15% $ 32,400 18% $ 180,000 25% 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.

Answer 1

Contribution Margin ratio Fixed Cost Total Company Chicago Minnepolis 46% 70% 40% 345600 9 3600 108000 Break Even point in Dollars = Fixed Cost/CM ratio 751304 133714 270000 Answers 1-A)Company Wide Break Even Point in Dollars 751304 1-B)Break Even point for Chicago ang Minneapolis | BEP Dollars. Chicago 133714 Minnepolis 2700001 1-C) IS the Company Wide Break even Point is ---------Sum of Chicago Greater than and minneapolis BEP Dollars