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A&N is a consulting firm that specializes in projects for the retail sector. In the next month, the company would like to initiate an
A&N is a consulting firm that specializes in projects for the retail sector. In the next month, the company would like to initiate an intensive advertising campaign in one of these two retail market segments: the discount store segment and the department store segment. The campaign would cost $10,000. Marketing studies indicate that such a campaign would increase sales in the discount store market by $50,000 or increase sales in the department store market by $45,000. Which market should the company focus its advertising and what is the net increase of segment margin for that market? Department Store Discount Store Segment Segment Sales $230,000 $300,000 Variable Expenses 138,000 120,000 Contribution Margin 92,000 180,000 Traceable Fixed 17,000 24,000 Expenses Market Segment Margin 75,000 156,000
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