Requlred Information[The following Information applies to the questions displayed below.]Raner, Harris & Chan Is a consulting firm that speclalizes In Information systems for medical and dental clinics. The firm hastwo offices-one In Chicago and one In Minneapolls. The firm classifies the direct costs of consulting Jobs as varlablecosts. A contribution format segmented Income statement for the company's most recent year is glven:OfficeMinneapolis$ 420, e00252,000168,e0063, e00$ 105,e00Total CompanySalesvariable expensesContribution marginTraceable fixed expensesChicago$ 185,e0031,50073,50054,600$ 525,e00100.e%1ee%100%283,50054.e%30%6e%241,500117,600123,9ee46.0%70%40%22.4%52%15%Office segment margin23.6%2418,9ee18%25%Common fixed expenses not traceable to offices84, eee 16.0%Net operating income2439,9007.6%Requlred:1-a. Compute the companywlde break-even polnt In dollar sales.1-b. Compute the break-even polnt for the Chicago office and for the Minneapolis office.1-c. Is the companywide break-even polnt greater than, less than, or equal to the sum of the Chicago and Minneapolis break-evenpolnts?

The break even sales are the sales where business earns no profit no loss.

Requlred 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 varlable costs. A contribution format segmented Income statement for the company's most recent year is given: Office Chicago $ 1e5,e0e Minneapolis $ 420, eee 252,000 168, eee 63, eee $ 1e5, eee Total Company $ 525,000 100.e% 283,5ee Sales 1ee% 10e% variable expenses 54. e% 3e% 6e% 31,500 73,5ee 54,6ee %24 241,500 Contribution margin Traceable fixed expenses 46.ex 7e% 40% 117,6ee 22.4% 52% 15% Office segment margin 123,90e 23.6% 18,90e 18% 25% Common fixed expenses not traceable to offices 84, eee 16. e% Net operating income 39,9ee 7.6% Requlred: 1-a. Compute the companywlide break-even point In dollar sales. 1-b. Compute the break-even polnt 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 polnts?

Requlred 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 varlable costs. A contribution format segmented Income statement for the company's most recent year is given: Office Chicago $ 1e5,e0e Minneapolis $ 420, eee 252,000 168, eee 63, eee $ 1e5, eee Total Company $ 525,000 100.e% 283,5ee Sales 1ee% 10e% variable expenses 54. e% 3e% 6e% 31,500 73,5ee 54,6ee %24 241,500 Contribution margin Traceable fixed expenses 46.ex 7e% 40% 117,6ee 22.4% 52% 15% Office segment margin 123,90e 23.6% 18,90e 18% 25% Common fixed expenses not traceable to offices 84, eee 16. e% Net operating income 39,9ee 7.6% Requlred: 1-a. Compute the companywlide break-even point In dollar sales. 1-b. Compute the break-even polnt 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 polnts?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 34P: Mason, Durant, and Westbrook (MDW) is a tax services firm. The firm is located in Oklahoma City and...

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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: Sales Variable expenses Contribution margin Traceable fixed expenses office segment margin Common fixed expenses not traceable to offices Net operating income Total Company $ 477,000 238,500 238,500 133,560 104,940 66,780 $38,160 100.00% 50.00% 50.00% 28.00% 22.00% 14.00% 8.00% Chicago $ 159,000 47,700 111,300 82,680 $ 28,620 Office 100.00% 30.00% 70.00% 52.00% 18.00 % Minneapolis $318,000 190,800 127, 200 50,880 $ 76,320 100.00% 60.00% 40.00% 16.00% 24.00% Required: 1-a. Compute the companywide break-even point in dollar sales. 1-b. Compute the…
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 100.0% 54.0% 46.0% 22.4% Minneapolis $ 420,000 252,000 168,000 63,000 $ 105,000 Chicago $ 105,000 $ 525,000 283,500 Sales 100% 100% Variable expenses Contribution margin Traceable fixed expenses 30% 60% 40% 15% 31,500 73,500 54,600 18,900 70% 241,500 117,600 52% Office segment margin 123,900 23.6% 18% 25% Common fixed expenses not traceable to offices 84,000 16.0% Net operating income 39,900 7.6% 3. Assume that sales in Chicago increase by $35,000 next year and that sales in Minneapolis remain unchanged. Assume no change in fixed…
Required information [The following information applies to the questions displayed below.] Raner, Harris and Chan is a consulting firm specializing in information systems for medical and dental clinics. The firm has two offices-one in Chicago and one in Minneapolis. It 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 below: Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Net operating income Total Company Net operating income increase $ 468,000 234,000 234,000 131,040 102,960 65,520 $ 37,440 100.00% 50.00% 50.00% 28.00% 22.00% 14.00% 8.00% Chicago $ 156,000 46,800 109, 200 81,120 $ 28,080 Office 100.00% 30.00% 70.00% 52.00% 18.00% Minneapolis $ 312,000 187, 200 124,800 49,920 $ 74,880 100.00% 60.00% 40.00% 16.00% 24.00% 2. How much would the company's net operating income increase if…
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: Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Net operating income Total Company $ 454,500 227,250 227,250 127,260 99,990 63,630 $ 36,360 100.00% 50.00% 50.00% 28.00% 22.00% 14.00% 8.00% Chicago $ 151,500 45,450 106,050 78,780 $ 27,270 Office 100.00% 30.00% 70.00% 52.00% 18.00% Minneapolis $ 303,000 181,800 121,200 48,480 $ 72,720 100.00% 60.00% 40.00% 16.00% 24.00% 3. Assume that sales in Chicago increase by $50,500 next year and that sales in Minneapolis remain…
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 $ 513,000 Sales Variable expenses Contribution margin Traceable fixed expenses 100.00% 50.00% 50.00% Chicago $ 171,000 51, 300 119, 700 88,920 Minneapolis 100.00% 60.00 40.00% 16.00% $ 342,000 100.00% 30.00% 70.00% 52.00% 256, 500 205, 200 136,800 54,720 $ 82,080 256, 500 143,640 28.00% Office segment margin $ 30,780 112,860 22.00% 18.00% 24.00% Common fixed expenses not traceable to offices 71,820 $ 41,040 14.00% Net operating income 8.00% 2. By how much would the company's net operating income increase if Minneapolis increased its…
Required information [The following information applies to the questions displayed below.] Raner, Harris and Chan is a consulting firm specializing in information systems for medical and dental clinics. The firm has two offices-one in Chicago and one in Minneapolis. It 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 below: Sales. Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Net operating income. Total Company Net operating income increase $ 508,500 254,250 254,250 142,380 111,870 71,190 $ 40,680 100.00% 50.00% 50.00% 28.00% 22.00% 14.00% 8.00% Chicago $ 169,500 50,850 118,650 88,140 $ 30,510 Office 100.00% 30.00% 70.00% 52.00% 18.00% Minneapolis $ 339,000 203,400 135,600 54,240 $ 81,360 100.00% 60.00% 40.00% 16.00% 24.00% woll 2. How much would the company's net operating income increase if…
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: Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin. Common fixed expenses not traceable to offices Net operating income. Total Company $ 450,000 225,000 225,000 126,000 99,000 63,000 $36,000 100% 50% 50% 28% 22% 14% 8% Chicago $ 150,000 45,000 105,000 78,000 $ 27,000 Office 100% 30% 70% 52% 18% Minneapolis $ 300,000 180,000 120,000 48,000 $ 72,000 100% 60% 40% 16% 24% 2. By how much would the company's net operating income increase if Minneapolis increased its sales by $75,000 per year? Assume no change in cost…
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 Sales Variable expenses Contribution margin Traceable fixed expenses office segment margin Common fixed expenses not traceable to offices Net operating income i Total Company $ 495,000 247,500 247,500 138,600 108,900 69,300 $ 39,600 100.00% 50.00% 50.00% 28.00% 22.008 14.00% 8.00% Chicago $ 165,000 49,500 115,500 85,800 $ 29,700 100.00% 30.00% 70.00% 52.00 18.00% Minneapolis $ 330,000 198,000 132,000 52,800 $ 79,200 100.00% 60.00% 40.00% 16.00 24.00% 3. Assume that sales in Chicago increase by $55,000 next year and that sales in Minneapolis remain…
! 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: Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Net operating income Total Company Net operating income increase $ 463,500 231,750 231,750 129,780 101,970 64,890 $ 37,080 100.00% 50.00% 50.00% 28.00% 22.00% 14.00% 8.00% Chicago $ 154,500 46,350 108,150 80, 340 $ 27,810 Office 100.00% 30.00% 70.00% 52.00% 18.00% Minneapolis $ 309,000 185,400 123,600 49,440 $ 74,160 100.00% 60.00% 40.00% 16.00% 24.00% 2. By how much would the company's net operating income increase…
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 100% 50% 50% 100% 60% Variable expenses Contribution margin. $ 150,000 45,000 105,000 78,000 40% Traceable fixed expenses 28% 16% Office segment margin 22% $ 27,000 24% Common fixed expenses not traceable to offices 14% 8% Net operating income. Assume that Minneapolis' sales by major market are: Market Minneapolis Medical Dental Sales $ 300,000 100% $ 200,000 100% $ 100,000 100% Variable expenses. 180,000 60% Contribution margin 120,000 40% 128,000 64% 72,000 36% 12,000 6% $ 60,000 30% 52,000 52% 48,000 48%…
[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…
! 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 Chicago Total Company $ 450,000 225,000 Minneapolis $ 300,000 Sales 100% 60% Variable expenses Contribution margin 100% 50% 50% 28% 225,000 $ 150,000 45,000 105,000 78,000 $ 27,000 100% 30% 70% 52% 18% 180,000 120,000 48,000 40% 16% Traceable fixed expenses 126,000 Office segment margin 99,000 22% $ 72,000 24% Common fixed expenses not traceable to offices 63,000 14% Net operating income $36,000 8% 2. By how much would the company's net operating income increase if Minneapolis increased its sales by $75,000 per year? Assume no change in cost…