Reference no: EM132470795

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:

	Total Company			Office
			Chicago		Minneapolis
Sales	$1,012,500	100.0%	$     202,500	100%	$     810,000	100%
Variable expenses	546,750	54.0%	60,750	30%	486,000	60%
Contribution margin	465,750	46.0%	141,750	70%	324,000	40%
Traceable fixed expenses	226,800	22.4%	105,300	52%	121,500	15%
Office segment margin	238,950	23.6%	$      36,450	18%	$     202,500	25%
Common fixed expenses not traceable to offices	162,000	16.0%
Net operating income	$          76,950	7.6%

Required:

Question 1-a Compute the companywide break-even point in dollar sales.

Question 1-b Compute the break-even point for the Chicago office and for the Minneapolis office.

Question 1-c Is the companywide break-even point greater than, less than, or equal to the sum of the Chicago and Minneapolis break-even points?