[The following information applies to the questions displayed below.] 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: Chicago Sales Variable expenses Contribution margin Total Company Office Minneapolis $ $ 450,000 225,000 225,000 126,000 99,000 63,000 $36,000 100 % $ 150,000 100 % $ 300,000 100% 50% 45,000 30% 180,000 60% 50% 105,000 70 % 120,000 40% 28% 78,000 52% 48,000 16% 22% $27,000 18 % $72,000 24 % 14% 8% Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Net operating income 3. Assume that sales in Chicago increase by $50,000 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).)
[The following information applies to the questions displayed below.] 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: Chicago Sales Variable expenses Contribution margin Total Company Office Minneapolis $ $ 450,000 225,000 225,000 126,000 99,000 63,000 $36,000 100 % $ 150,000 100 % $ 300,000 100% 50% 45,000 30% 180,000 60% 50% 105,000 70 % 120,000 40% 28% 78,000 52% 48,000 16% 22% $27,000 18 % $72,000 24 % 14% 8% Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Net operating income 3. Assume that sales in Chicago increase by $50,000 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).)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter7: Allocating Costs Of Support Departments And Joint Products
Section: Chapter Questions
Problem 30E: A company uses charging rates to allocate service department costs to the using departments. The...
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![[The following information applies to the questions displayed below.]
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:
Chicago
Sales
Variable expenses
Contribution margin
Traceable fixed expenses
Office segment margin
Common fixed expenses not traceable to offices
Total Company Office
Minneapolis
100 % $ 150,000 100 % $ 300,000 100%
$ 450,000
225,000 50% 45,000 30% 180,000 60%
225,000 50% 105,000 70 % 120,000 40%
126,000 28% 78,000 52% 48,000 16%
99,000 22% $ 27,000 18 %
63,000 14%
$ 36,000 8%
$72,000 24%
Net operating income
3. Assume that sales in Chicago increase by $50,000 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).)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F30af12ae-b3e7-492a-88b3-52264e8954e3%2Fa204ff93-8660-4b8b-aa30-3cd84d875614%2F31mvmtk_processed.jpeg&w=3840&q=75)
Transcribed Image Text:[The following information applies to the questions displayed below.]
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:
Chicago
Sales
Variable expenses
Contribution margin
Traceable fixed expenses
Office segment margin
Common fixed expenses not traceable to offices
Total Company Office
Minneapolis
100 % $ 150,000 100 % $ 300,000 100%
$ 450,000
225,000 50% 45,000 30% 180,000 60%
225,000 50% 105,000 70 % 120,000 40%
126,000 28% 78,000 52% 48,000 16%
99,000 22% $ 27,000 18 %
63,000 14%
$ 36,000 8%
$72,000 24%
Net operating income
3. Assume that sales in Chicago increase by $50,000 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).)
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