Raner, Harris and 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: Total Company Chicago Minneapolis $ 330,000 Sales Variable expenses Contribution margin Office $ 165,000 100% 49,500 30% 115,500 70% 85,800 52% 18% 100% 198,000 60% 132,000 48% $ 495,000 100% 247,500 58% 247,500 58% 138,600 28% 108,900 22% 69,300 14% $ 39,680 8% Traceable fixed expenses 52,800 16% 24% $ 29,700 $ 79,200 office segment margin Common fixed expenses not traceable to offices Net operating income 3. Assume that sales in Chicago increase by $55,000 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 Intermediate calculations and percentage answers to 1 decimal place (l.e. 0.1234 should be entered as 12.3 and other answers to the nearest whole dollar.))

Raner, Harris and 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: Total Company Chicago Minneapolis $ 330,000 Sales Variable expenses Contribution margin Office $ 165,000 100% 49,500 30% 115,500 70% 85,800 52% 18% 100% 198,000 60% 132,000 48% $ 495,000 100% 247,500 58% 247,500 58% 138,600 28% 108,900 22% 69,300 14% $ 39,680 8% Traceable fixed expenses 52,800 16% 24% $ 29,700 $ 79,200 office segment margin Common fixed expenses not traceable to offices Net operating income 3. Assume that sales in Chicago increase by $55,000 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 Intermediate calculations and percentage answers to 1 decimal place (l.e. 0.1234 should be entered as 12.3 and other answers to the nearest whole dollar.))

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter10: Evaluating Decentralized Operations

Section: Chapter Questions

Problem 6E: Varney Corporation, a manufacturer of electronics and communications systems, allocates Computing...

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