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 hastwo offices-one in Chicago and one in Minneapolis. The firm classifies the direct costs of consulting jobs as variablecosts. A contribution format segmented income statement for the company's most recent year is given:OfficeTotal Company$ 513,000SalesVariable expensesContribution marginTraceable fixed expenses100.00%50.00%50.00%Chicago$ 171,00051, 300119, 70088,920Minneapolis100.00%60.0040.00%16.00%$ 342,000100.00%30.00%70.00%52.00%256, 500205, 200136,80054,720$ 82,080256, 500143,64028.00%Office segment margin$ 30,780112,86022.00%18.00%24.00%Common fixed expenses not traceable tooffices71,820$ 41,04014.00%Net operating income8.00%2. By how much would the company's net operating income increase if Minneapolis increased its sales by $85,500 per year? Assumeno change in cost behavior patterns.Net operating income increase< Prevestehere to searchlogi

Contribution margin ratio for Minneapolis = Contribution margin for Minneapolis / Sales for…

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 $ 513,000 256, 500 256, 500 143,640 Chicago $ 171,000 51,300 119,700 88,920 $ 30,780 Minneapolis $ 342,000 205, 200 136,800 54,720 $ 82,060 Sales 100.00% 100.ee% 30.00% 70.00% 52.00% 100.00% Variable expenses Contribution margin Traceable fixed expenses 5e.e0x 5e.00% 60.00 40.00 28.00% 16.00 Office segment margin 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 sales by $85.500 per year? Assume no change in cost behavior patterns. Net operating income increase

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 $ 513,000 256, 500 256, 500 143,640 Chicago $ 171,000 51,300 119,700 88,920 $ 30,780 Minneapolis $ 342,000 205, 200 136,800 54,720 $ 82,060 Sales 100.00% 100.ee% 30.00% 70.00% 52.00% 100.00% Variable expenses Contribution margin Traceable fixed expenses 5e.e0x 5e.00% 60.00 40.00 28.00% 16.00 Office segment margin 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 sales by $85.500 per year? Assume no change in cost behavior patterns. Net operating income increase

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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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…
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 has two offices-one In Chicago and one In Minneapolls. 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 glven: Office Minneapolis $ 420, e00 252,000 168,e00 63, e00 $ 105,e00 Total Company Sales variable expenses Contribution margin Traceable fixed expenses Chicago $ 185,e00 31,500 73,500 54,600 $ 525,e00 100.e% 1ee% 100% 283,500 54.e% 30% 6e% 241,500 117,600 123,9ee 46.0% 70% 40% 22.4% 52% 15% Office segment margin 23.6% 24 18,9ee 18% 25% Common fixed expenses not traceable to offices 84, eee 16.0% Net operating income 24 39,900 7.6% Requlred: 1-a. Compute the companywlde break-even polnt In dollar sales. 1-b. Compute the break-even polnt for the Chicago office…
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%…
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 $ 870,000 100 % $ 580,000 100 % $ 290,000 100 % Variable expenses 522,000 60 % 377,000 65 % 145,000 50 % Contribution margin 348,000 40 % 203,000 35 % 145,000 50 % Traceable fixed expenses 104,400 12 % 29,000 5 % 75,400 26 % Market segment margin 243,600 28 % $ 174,000 30 % $ 69,600 24 % Common fixed expensesnot traceable to markets 26,100 3 % Office segment margin $ 217,500 25 % The company would like to initiate an intensive advertising campaign in…
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 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 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: 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 $ 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: 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…
A company uses charging rates to allocate service department costs to the using departments. The accountant compiled the following information on one of the service departments: If Department K plans to use 1,350 hours of the service departments service in the coming year, how much of the service departments cost is allocated to Department K? a. 3,375 b. 27,300 c. 26,325 d. 23,950