ml k 5 Practice Required information The following information applies to the qu

Question

ml k 5 Practice 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 $862,500 100.0% S 172,500 100% $690,000 iees 414,000 60% 276,800 403 15% Sales Variable expenses Contribution nargin Traceable fixed expenses Office segnent margin Common fixed expenses not traceable to offices Net operating income 465,7584. 120,758 396,750 46.0% 193,200 22.4% 89,700 528 193,500 203,558 23.6% $ 31,ese 18% $ 172,500 25% 135,000 16.0% 54-0% 51,750 ??€ 120,750 7 $ 65,558 7.6% y how much would the company's net operating income increase if Minneapolis increased its sales by $86.250 per year? Assun hange in cost behavior patterns

Explanation / Answer

Operating income increase=86250*40%= $34500

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