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! Required information Exercise 7-16 Working with a Segmented Income Statement; Break-Even Analysis [LO7-4, LO7-5] [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: Office Total Company 450,000 225,000 225,000 126,000 Chicago $ 150,000 45,000 105,000 78,000 Minneapolis 300,000 180,000 120,000 48,000 $ 72,000 Sales Variable expenses Contribution margin Traceable fixed expenses 100% 100% 100% 50% 30% 60% 40% 50% 70% 28% 52% 16% Office segment margin $27,000 18% 24% 99,000 22% Common fixed expenses not traceable to offices 63,000 14% $ 36,000 8% Net operating income Exercise 7-16 Part 2 2. By how much would the company's net operating income increase if Minneapolis increased its sales by $75,000 per year? Assume no change in cost behavior patterns. Net operating income increase Assume that sales in Chicago increase by $50,000 next year and that sales in Minneapolis remain unchanged. Assume no change fixed costs Prepare a new segmented income statement for the company. (Round your percentage answers to 1 decimal place (i.e. 0.1234 hould be entered as 12.3).) Segments Minneapolis Total Company Chicago Amount Amount % Amount

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