Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. required information [the following information ap

Required information [The following information applies to the questions displayed below.]    Raner, Harris & Chan is a consulting...

Free

50.1K

Verified Solution

Question

Accounting

Required information

[The following information applies to the questionsdisplayed below.]

  

Raner, Harris & Chan is a consulting firm that specializesin information systems for medical and dental clinics. The firm hastwo offices—one in Chicago and one in Minneapolis. The firmclassifies the direct costs of consulting jobs as variable costs. Acontribution format segmented income statement for the company’smost recent year is given:

Office
Total CompanyChicagoMinneapolis
Sales$525,000100.0%$105,000100%$420,000100%
Variable expenses283,50054.0%31,50030%252,00060%
Contribution margin241,50046.0%73,50070%168,00040%
Traceable fixed expenses117,60022.4%54,60052%63,00015%
Office segment margin123,90023.6%$18,90018%$105,00025%
Common fixed expenses not traceable to offices84,00016.0%
Net operating income$39,9007.6%

3. Assume that sales in Chicago increase by $35,000 next yearand that sales in Minneapolis remain unchanged. Assume no change infixed costs.

a. Prepare a new segmented income statement for the company.(Round your percentage answers to 1 decimal place (i.e.0.1234 should be entered as 12.3).)

Answer & Explanation Solved by verified expert
4.0 Ratings (619 Votes)

Requirement 3

Increase in net income (64400-39900) $       24,500.00
Income Statement
Office
Total Company Chicago Minneapolis
Amount % Amount % Amount %
Sales $    5,60,000.00 100.0% $   1,40,000.00 100.0% $         4,20,000.00 100.0%
Variable cost $    2,94,000.00 52.5% $       42,000.00 30.0% $         2,52,000.00 60.0%
Contribution margin $    2,66,000.00 47.5% $       98,000.00 70.0% $         1,68,000.00 40.0%
Traceable fixed cost $    1,17,600.00 21.0% $       54,600.00 39.0% $             63,000.00 15.0%
Office segment margin $    1,48,400.00 26.5% $       43,400.00 31.0% $         1,05,000.00 25.0%
Common fixed cost $        84,000.00 15.0%
Net Operating income $        64,400.00 11.5%

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

the term debit means increase and credit means decrease. True or false? Explain your answer. Explain in...

Accounting
Q

find the expected value and the variance of the number of times one must throw a...

Statistics
Q

Now that you have almost completed the course, as a new expert in Anatomy and Physiology,...

Medical Sciences
Q

Materials Science: Composites (Chapter 16) How do we predict the stiffness and strength of the various types...

Physics
Q

If 14 of the nucleotides from a DNA molecule contain the base T what percent...

Biology
Q

The price of milk would differ by 4 Correct Answer The price of milk would...

Statistics
Q

Word Problem 10-23(Algo)[LU 10-3(1)] Max Wholesaler borrowed $12,500 on a 9%,120-day note. After...

Accounting
Q

A dividends account represents the amount of earnings paid to stockholders

Accounting
Q

All of the following are true regarding the FASB Accounting Standards Codification (ASC) except a....

Accounting
Q

Which of the following statements regarding the instalment sale of an entire bussiness is false?...

Accounting
Q

I hope that you enjoyed working with the annual report of your selected company this...

Accounting
Q

Bottum Corporation, a manufacturing Corporation, has provided data concerning its operations for May. The beginning...

Accounting