Raner, Harris and Chan is a consulting firm that specializes in information systems for medical anddental clinics. The firm has two offices-one in Chicago and one in Minneapolis. The firm classifiesthe direct costs of consulting jobs as variable costs. A contribution format segmented incomestatement for the company's most recent year is given: Total Company Office ChicagoMinneapolis Sales $ 526, 500 100.00% $ 175,500 100.00% $ 351,000 100.00% Variable expenses263, 250 50.00% 52, 650 30.00 % 210, 600 60.00% Contribution margin263, 250 50.00 % 122,850 70.00% 140, 400 40.00% Traceable fixed expenses147,420 28.00% 91,260 52.00 % 56, 160 16.00% Office segment margin 115,830 22.00% $31,590 18.00% $ 84, 240 24.00% Common fixed expenses not traceable to offices 73,710 14.00%Net operating income $ 42,120 8.00% 3. Assume that sales in Chicago increase by $58, 500 nextyear and that sales in Minneapolis remain unchanged. Assume no change in fixed costs. a.Prepare a new segmented income statement for the company.

Segmented income statement helps a company make decisions related to whether to shut down a…

Answered: dental clinics. The firm has two…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 4EB: Roper Furniture manufactures office furniture and tracks cost data across their process. The...

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Roper Furniture manufactures office furniture and tracks cost data across their process. The following are some of the costs that they incur. Classify these costs as fixed or variable costs, and as product costs or period costs. Wood used to produce desks ($125,00 per desk) Production labor used to produce desks ($15 per hour) Production supervisor salary ($45,000 per year) Depreciation on factory equipment ($60,000 per year) Selling and administrative expenses ($45,000 per year) Rent on corporate office ($44,000 per year) Nails, glue, and other materials required to produce desks (varies per desk) Utilities expenses for production facility Sales staff commission (5% of gross sales)
Carr Company provides human resource consulting services to small- and medium-sized companies. Last year, Carr provided services to 700 clients. Total fixed costs were $159.000 with total variable costs of $87x500. Based on this information, complete this chart:
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: Assume that Minneapolis’ sales by major market are: Market Minneapolis Medical Dental Sales $ 570,000 100 % $ 380,000 100 % $ 190,000 100 % Variable expenses 342,000 60 % 247,000 65 % 95,000 50 % Contribution margin 228,000 40 % 133,000 35 % 95,000 50 % Traceable fixed expenses 68,400 12 % 19,000 5 % 49,400 26 % Market segment margin 159,600 28 % $ 114,000 30 % $ 45,600 24 % Common fixed expensesnot traceable to markets 17,100 3 % Office segment margin $ 142,500 25 % The company would like to initiate an intensive advertising campaign in one of…
Required information [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: Office Total Company Chicago Minneapolis Sales $ 150,000 100% 50% 50% Variable expenses Contribution margin 45,000 105,000 78,000 Traceable fixed expenses 28% Office segment margin 22% $ 27,000 Common fixed expenses not traceable to offices 14% Net operating income 8% Assume that Minneapolis' sales by major market are: Market Minneapolis Medical Dental Sales $ 300,000 100% Variable expenses Contribution margin $ 200,000 100% $ 100,000 100% 128,000 64% 52,000 52% 72,000 36% 48,000 48% 12,000 6% 21,000 21% $ 60,000 30% 27% 180,000 60% 120,000 40% 33,000…
Required information [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: Office Total Company Chicago Minneapolis $ 420,000 $ 525,000 283,500 241,500 Sales 100.0% $ 105,000 100% 100% Variable expenses 54.0% 31,500 30% 252,000 60% Contribution margin Traceable fixed expenses 70% 52% 46.0% 73,500 54,600 168,000 63,000 40% 117, 600 22.4% 15% Office segment margin 123,900 23.6% $ 18,900 18% $ 105,000 25% 84,000 $4 Common fixed expenses not traceable to offices 16.0% Net operating income 39,900 7.6% 2. By how much would the company's net operating income increase if Minneapolis increased its sales by $52,500 per year? Assume no…
Required information The Personnel Department at Hernandez Bros. is centralized and provides services to the two operating units: Miami and New York. The Miami unit is the original unit of the company and is well established. The New York unit is new, much like a start-up company. The costs of the Personnel Department are allocated to each unit based on the number of employees in order to determine unit profitability. The current rate is $610 per employee. Data for the fiscal year just ended show the following: Miami New York Number of employees 1,310 410 Number of new hires 11 31 Number of employees departing 19 19 Required: a. Compute the cost allocated to each unit using the current allocation system. b. Livan, the manager of the Miami unit, is unhappy with the allocation from Personnel. He believes that he gets little benefit other than the occasional hire and termination help. He asks the controller’s office to estimate the amount of Personnel Department…
Faune Furniture Co. consists of two divisions, Bedroom Division and Dining Room Division. The results of operations for the most recent quarter are: Bedroom Division Dining Room Division Total Sales $501,200 $751,800 $1,253,000 Variable costs 255,612 443,562 699,174 Contribution margin $245,588 $308,238 $553,826 (a) Determine the company's sales mix. (Round answers to 2 decimal places, e.g. 0.15.) Bedroom Division Dining Room Division Sales mix
Faune Furniture Co. consists of two divisions, Bedroom Division and Dining Room Division. The results of operations for the most recent quarter are: BedroomDivision Dining RoomDivision Total Sales $500,000 $750,000 $1,250,000 Variable costs 225,000 450,000 675,000 Contribution margin $275,000 $300,000 $ 575,000 (a) Determine the company’s sales mix. (Round answers to 2 decimal places, e.g. 0.15.) Sales mix Bedroom Division enter a share of the division Dining Room Division enter a share of the division
Brant Consulting designs costing and transfer pricing system for its clients. Here is a summary of volume, revenue, and cost expectations for the upcoming year: Item Costing Projects Per Per Unit 75 Jobs Total Unit 50 Jobs $10,000 $500,000 $15,000 $1,125,000 $1,625,000 4,500 225,000 11,500 862,500 1,087,500 Contribution margin $5,500 $275,000 $3,500 $262,500 $537,500 Fixed cost 473,000 Profit $64,500 Assume a constant sales mix. (a) How many Costing systems must Brant Consulting sell to breakeven? How many Transfer Pricing systems must Brant Consulting sell to breakeven? (b) How many Costing systems must Brant Consulting sell to achieve a target profit of $86,000? How many Costing systems must Brant Consulting sell to achieve a target profit of $86,000? Transfer Pricing Projects Revenue Variable cost Firm X X X x Round up the total number of systems before determining the allocation between Costing and Transfer Pricing.
Using ABM in a service company Haworth Company is a management consulting firm. The company expects to incur $167,500 of indirect costs this year. Indirect costs are allocated based on the following activities: Haworth bills clients at 120% of the direct labor costs. The company has estimated direct labor costs at $240 per hour. Last month, Haworth completed a consulting job for Client 76 and used the following resources: Determine the total cost of the consulting job and the operating income earned.
Lewisville CorporationIn order to better match cost with revenues, Lewisville Corporation distributes its service department overhead costs to producing departments. Information for April is presented here. Maintenance Utilities Overhead costs incurred $18,700 $9,000 Service provided to: Maintenance Dept. 10% Utilities Dept. 20% Producing Dept. A 40% 30% Producing Dept. B 40% 60% Assume that Lewisville Corporation distributes service department overhead costs based on the algebraic method. What would be the formula to determine the total maintenance costs? Group of answer choices M = $18,700 + .10U M = $9,000 + .20U M = $18,700 + .30U + .40A + .40B M = $27,700 + .40A + .40B
Meargia Plastics is evaluating its plastic bottles division. The accounting manager has come up with the following data for the year: contribution margin of $570,000, controllable fixed of $228,000, and noncontrollable fixed costs of $57,000. Required: 1. What is the controllable margin? Controllable Margin 2. What is the total contribution by profit center (CPC)?

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