Required information Exercise 6-16 Working with a Segmented Income Statement; Break-Even Analysis [LO6-4, LO6-5] [The...
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Required information Exercise 6-16 Working with a Segmented Income Statement; Break-Even Analysis [LO6-4, LO6-5] [The following information applies to the questions displayed below.) 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: Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Net operating income Total Company $ 900,000 100.0% 486,000 54.0% 414,000 46.0% 201,600 22.4% 212,400 23.68 144,000 16.0% $ 68,400 7.6% Office Chicago Minneapolis $ 180,000 100% $ 720,000 100% 54,000 30% 432,000 60% 126,000 70% 288,000 40% 93,600 52% 108,000 15$ $ 32,400 18% $ 180,000 258 Exercise 6-16 Part 2 2. By how much would the company's net operating income increase if Minneapolis increased its sales by $90,000 per year? Assume no change in cost behavior patterns. Net operating income increase
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