AH ? CGDE ... Document1 Q Home Insert Draw Design Layout References Mailings Review View Tell me Share Comments Calibri (Bo... 11 A A Aav aBbCcDdEe AaBbCcDdEe 19 AaBb AaBbCcDdEE AaBb AaBbCcDdEE AaBbCcDdEe AaBbCcDdEe AaBbCcDdEe Paste B I U v ab x, x Av LAV E Normal No Spacing Heading 1 Heading 2 Title Subtitle Subtle Emph Emphasis Intense Emp... Styles Dictate Editor Pane 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 $ 100.00% $ 100 . 00% $ 526, 500 175, 500 351 , 000 100 . 00% Variable 263, 250 50 . 00% 52, 650 30 . 00% 60 . 00% expenses 210, 600 Contribution margin 263, 250 50.00% 122, 850 70 . 00% 140, 400 40 . 00% Traceable fixed 147, 420 28. 00% 91, 260 52 . 00% 56, 160 16.00% expenses Office segment 115, 830 22. 00% $ 31 , 590 18.00% 84, 240 24. 00% margin Common fixed expenses not traceable to offices 73, 710 14. 00% Net operating $ income 42, 120 8. 00% Assume that Minneapolis' sales by major market are: Market Minneapolis Medical Dental Sales $ $ 351, 000 100.00% 234 , 000 100 .00% 117, 000 100.00% Variable 210, 600 60. 008 149, 760 64 . 00% 60, 840 52 . 00% expenses Contribution 140, 400 40 . 00% 84, 240 36.00% 56, 160 48 . 00% margin Traceable fixed 38, 610 11 . 00% 14, 040 6.00% 24, 570 21 . 00% expenses Market segment 29.00% margin 101, 790 $ 70, 200 30 . 00% 31, 590 27.00% Common fixed expenses not traceable to Page 1 of 2 301 words X English (United States) Focus Lo E 147%AH ? CGDE ... Document1 Q Home Insert Draw Design Layout References Mailings Review View Tell me Share Comments Calibri (Bo... 11 A A Aav a- v aBbCcDdEe AaBbCcDdEe 19 AaBb AaBbCcDdEE AaBb AaBbCcDdEE AaBbCcDdEe AaBbCcDdEe AaBbCcDdEe Paste B I U v ab x, x AvLAV Normal No Spacing Heading 1 Heading 2 Title Subtitle Subtle Emph Emphasis Intense Emp... Styles Dictate Editor Pane Market Minneapolis Medical Dental Sales $ 351 , 000 100 .00% 234 , 000 100 .00% 117, 000 100. 00% Variable 210, 600 expenses 60.00% 149, 760 64. 00% 60, 840 52 . 00% Contribution 140, 400 40 . 00% 84, 240 56, 160 48 . 00% margin 36.00% Traceable fixed 11 . 00% 14, 040 6. 00% expenses 38 , 610 24 , 570 21 . 00% Market segment 101, 790 29. 00% $ 30. 00% $ margin 70, 200 31 , 590 27.00% Common fixed expenses not traceable to markets 17, 550 5.00% Office segment $ margin 84, 240 24. 00% The company would like to initiate an intensive advertising campaign in one of the two market segments during the next month. The campaign would cost $5,850. Marketing studies indicate that such a campaign would increase sales in the Medical market by $46,800 or increase sales in the Dental market by $40,950. Required: 1. How much would the company's profits increase (decrease) if it implemented the advertising campaign in the Medical Market? 2. How much would the company's profits increase (decrease) if it implemented the advertising campaign in the Dental Market? 3. In which of the markets would you recommend that the company focus its advertising campaign? Page 2 of 2 301 words English (United States) Focus Lo E 147%