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Raner, Harris and Chan is a consulting firm that specializes in information systems for medical...

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Accounting

Raner, Harris and Chan is a consulting firm that specializes in information systems for medical and dental clinics. The firm has two officesone 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 companys most recent year is given:
Total Company Office
Chicago Minneapolis
Sales $ 540,000100.00% $ 180,000100.00% $ 360,000100.00%
Variable expenses 270,00050.00%54,00030.00%216,00060.00%
Contribution margin 270,00050.00%126,00070.00%144,00040.00%
Traceable fixed expenses 151,20028.00%93,60052.00%57,60016.00%
Office segment margin 118,80022.00% $ 32,40018.00% $ 86,40024.00%
Common fixed expenses not traceable to offices 75,60014.00%
Net operating income $ 43,2008.00%
2. By how much would the companys net operating income increase if Minneapolis increased its sales by $90,000 per year? Assume no change in cost behavior patterns.

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