Question

Required information The following information applies to the questions displayed below! Part 3 of 3 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 7.16 Sales Variable expenses Contribution margin Traceable fixed expenses office segment margin Common fixed expenses not traceable to offices Net operating income Total Company $450,000 180.0% 243,000 54.0% 207,800 46.8% 100,800 22.4% 106,200 23.66 Office Chicago Minneapolis $ 90, eee 100% $360,000 100% 27,000 30% 216,00 68% 63,00 70 144,800 48% 46,800 52% 54,800 15% $ 16,200 18% $90,000 25% 72,000 $ 34,200 16.8% 7.6% References 3. Assume that sales in Chicago increase by $30,000 next year and that sales in Minneapolis remain unchanged. Assume no change in foed costs a. Prepare a new segmented income statement for the company. (Round your percentage answers to 1 decimal place fi.e. 0.1234 should be entered as 12.3).) Total Company Amount Chicago Amount Segments Minneapolis Amount % % 0. 00 0. 00 0.0 5 00 50 0.0

Answer 1

Segmented Income Statement
	Total Company		Chicago		Minnepolis
	Amount	%	Amount	%	Amount	%
Sales	480,000	100.00%	120,000	100.00%	360,000	100.00%
Variable Expenses	252,000	52.50%	36,000	30.00%	216,000	60.00%
Contribution Margin	228,000	47.50%	84,000	70.00%	144,000	40.00%
Traceable Fixed Expenses	100,800	21.00%	46,800	39.00%	54,000	15.00%
Segment Margin	127,200	26.50%	37,200	31.00%	90,000	25.00%
Common fixed expenses not traceable	72,000	15.00%
Net Operating Income	55,200	11.50%