Assume that Dallas' sales by major market are as the follows

0/24/2020 Exercises Market Construction Landscaping Dallas Clients Clients Sales . . . . . . . . . . ....... $600,000 100% $400,000 100% $200,000 100% Variable expenses . . . . . . . 360,000 60 260,000 65 100,000 50 Contribution margin .... .. 240,000 40 140,000 35 100,000 50 Traceable fixed expenses . . 72,000 12 20,000 5 52,000 26 Market segment margin . . . 168,000 28 $120,000 30% $ 48,000 24% Common fixed expenses not traceable to markets . 18,000 3 Office segment margin . ... $150,000 259% The company would like to initiate an intensive advertising campaign in one of the two markets during the next month. The campaign would cost $8,000. Marketing studies indicate that such a campaign would increase sales in the construction market by $70,000 or increase sales in the landscaping market by $60,000. Required: 1. In which of the markets would you recommend that the company focus its advertising campaign? Show computations to support your answer. 2. In Exercise 6-14, Dallas shows $90,000 in traceable fixed expenses. What happened to the $90,000 in this exercise? 2012 McGraw-Hill Higher Education Any use is subject to the Terms of Use and Privacy Notice