Exercise 6-16 Working with a Segmented Income Statement; Break-Even Analysis [LO6-4, LO6-5][The foll

Exercise 6-16 Working with a Segmented Income Statement; Break-Even Analysis [LO6-4, LO6-5][The following information applies to the questions displayed below.] 1-a.Compute the companywide break-even point in dollar sales. (Round “CM ratio” to 2 decimal places and final answer to the nearest whole dollar amount.) 1-b.Compute the break-even point for the Chicago office and for the Minneapolis office. (Round “CM ratio” to 2 decimal places and final answers to the nearest whole dollar amount.)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 below: OfficeTotal CompanyChicagoMinneapolis Sales$562,500 100.0%$112,500 100%$450,000 100% Variable expenses303,750 54.0%33,750 30%270,000 60% Contribution margin258,750 46.0%78,750 70%180,000 40% Traceable fixed expenses126,000 22.4%58,500 52%67,500 15% Office segment margin132,750 23.6%$20,250 18%$112,500 25% Common fixed expenses not traceable to offices90,000 16.0% Net operating income$42,750 7.6%

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