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Raner, Harris and Chan is a consulting firm that specializes in information systems for medical...

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Accounting

Raner, Harris and Chan is a consulting firm that specializes in information systems for medical and dental clinics. The firm has two officesone 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 companys most recent year is given:

Total Company Office
Chicago Minneapolis
Sales $ 504,000 100.00% $ 168,000 100.00% $ 336,000 100.00%
Variable expenses 252,000 50.00% 50,400 30.00% 201,600 60.00%
Contribution margin 252,000 50.00% 117,600 70.00% 134,400 40.00%
Traceable fixed expenses 141,120 28.00% 87,360 52.00% 53,760 16.00%
Office segment margin 110,880 22.00% $ 30,240 18.00% $ 80,640 24.00%
Common fixed expenses not traceable to offices 70,560 14.00%
Net operating income $ 40,320 8.00%

Required:

1-a. Compute the companywide break-even point in dollar sales.

1-b. Compute the break-even point for the Chicago office and for the Minneapolis office.

1-c. Is the companywide break-even point greater than, less than, or equal to the sum of the Chicago and Minneapolis break-even points?

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