Raner Harris Chan is a consulting firm that specializes in

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 Chicago Minneapolis $525,000 100.0% $105,000 100% $420,000 100 Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Net operating income 283,500 54.0% 241,500 46.0% _500 73,500 117,600 22.4% 54,600 123,900 23.6% $ 18,900 30% 70% 52% 18% 252,000 168,000 63,000 $105,000 60% 40 15% 25 84,000 $ 39,900 16.0% 7,6% 3. Assume that sales in Chicago increase by $35,000 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 percentage answers to 1 decimal place (i.e. 0.1234 should be entered as 12.3).)

Solution

Dear Student Thank you for using Chegg Please find below the answer Office Statementshowing Computations Total Company Chicago Minneapolis Paticulars Amount % Amount % Amount % Sales               560,000.00 100.00%            140,000.00 100.00%            420,000.00 100.00% Variables Costs               294,000.00 52.50%               42,000.00 30.00%            252,000.00 60.00% Contribution Margin               266,000.00 47.50%               98,000.00 70.00%            168,000.00 40.00% Traceable fixed expenses               117,600.00 21.00%               54,600.00 39.00%               63,000.00 15.00% Office segment margin               148,400.00 26.50%               43,400.00 31.00%            105,000.00 25.00% Common fixed expenses not traceable to offices                 84,000.00 15.00% Net Operating income                 64,400.00 11.50%