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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 $ 526,500 100.00% $ 175,500 100.00% $ 351,000 100.00%
Variable expenses 263,250 50.00% 52,650 30.00% 210,600 60.00%
Contribution margin 263,250 50.00% 122,850 70.00% 140,400 40.00%
Traceable fixed expenses 147,420 28.00% 91,260 52.00% 56,160 16.00%
Office segment margin 115,830 22.00% $ 31,590 18.00% $ 84,240 24.00%
Common fixed expenses not traceable to offices 73,710 14.00%
Net operating income $ 42,120 8.00%

3. Assume that sales in Chicago increase by $58,500 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 intermediate calculations and percentage answers to 1 decimal place (i.e. 0.1234 should be entered as 12.3 and other answers to the nearest whole dollar.))

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