Solution-How do compute companywide break-even point in

How do compute companywide break-even point in dollar sales

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Reference no: EM132631924

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:

Office
	Total Company		Chicago		Minneapolis
Sales	712,500	100%	142,500	100%	570,000	100%
Variable expenses	384,750	54%	42,750	30%	342,000	60%
Contribution margin	327,750	46%	99,750	70%	342,000	40%
Traceable fixed expenses	159,600	22.40%	74,100	52%	85,500	15%
Office segment margin	168,150	23.60%	25,650	18%	142,500	25%
Common fixed expenses not traceable to offices	114,000	16%
Net operating income	54,150	7.60%

Question 1: 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.)

Question 2: 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.)

Question 3: Is the companywide break-even point greater than, less than, or equal to the sum of the Chicago and Minneapolis break-even points?

Greater than
Less than
Equal to

Reference no: EM132631924

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How do compute companywide break-even point in dollar sales

Reference no: EM132631924

Reference no: EM132631924

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