Answered » You can buy a ready-made answer or pick a professional tutor to order an original one.
Need some Help: Managerial Accounting
Anonymous by Solid Savings” href=”http://www.Transtutors.com/homework-help/questions-and-answers/raner-harris-chan-consulting-firm-specializes-information-systems-medical-dental-clinics-f-q1257682#” class=”c2″>answerrating percentage by Solid Savings” href=”http://www.Transtutors.com/homework-help/questions-and-answers/raner-harris-chan-consulting-firm-specializes-information-systems-medical-dental-clinics-f-q1257682#” class=”c2″>100% by Solid Savings” href=”http://www.Transtutors.com/homework-help/questions-and-answers/raner-harris-chan-consulting-firm-specializes-information-systems-medical-dental-clinics-f-q1257682#” class=”c2″>
‘ Report abuse
by Solid Savings” href=”http://www.Transtutors.com/homework-help/questions-and-answers/raner-harris-chan-consulting-firm-specializes-information-systems-medical-dental-clinics-f-q1257682#” class=”c2″>
|
Raner, Harris, & Chan is a
consulting firm that specializes in by Solid Savings” href=”http://www.Transtutors.com/homework-help/questions-and-answers/raner-harris-chan-consulting-firm-specializes-information-systems-medical-dental-clinics-f-q1257682#” class=”c2″>information systems for medical anddental
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
below:
|
|
|
Office
|
|
Total Company
|
Chicago
|
Minneapolis
|
|
Sales
|
$937,500
|
100%
|
$187,500
|
100%
|
$750,000
|
100%
|
|
Variable expenses
|
506,250
|
54%
|
56,250
|
30%
|
450,000
|
60%
|
|
Contribution margin
|
431,250
|
46%
|
131,250
|
70%
|
300,000
|
40%
|
|
Traceable fixed expenses
|
210,000
|
22%
|
97,500
|
52%
|
112,500
|
15%
|
|
Office segment margin
|
221,250
|
24%
|
$33,750
|
18%
|
$187,500
|
25%
|
Common fixed expenses not
traceable to offices
|
150,000
|
16%
|
|
|
|
|
|
|
$71,250
|
8%
|
|
|
|
Requirement 1:
|
|
By how much would the company’s net operating income increase if Minneapolis increased its sales by $93,750 per year? Assume no change
in cost behavior patterns. (Omit the “$” sign in your response.)
|
|
Requirement 2:
|
|
Refer to the original data. Assume that sales in Chicago increase by $62,500 next year and that sales in Minneapolis remain unchanged.
Assume no change in fixed costs. Prepare a new segmented income statement for the company. (Round your
percentage amounts to 2 decimal places. Input all amount as positive value. Omit the “$” and “%” signs in your response.)
|
|
|
|
Segments
|
|
Total Company
|
Chicago
|
Minneapolis
|
|
Amount
|
%
|
Amount
|
%
|
Amount
|
%
|
|
Sales
|
$
|
|
$
|
|
$
|
|
|
Variable expenses
|
|
|
|
|
|
|
|
Contribution margin
|
|
|
|
|
|
|
|
Traceable fixed expenses
|
|
|
|
|
|
|
|
Office segment margin
|
|
|
$
|
|
$
|
|
Common fixed expenses
not traceable to segments
|
|
|
|
|
|
|
|
Net operating income
|
$
|
|
|
|
|
|
|
