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Assume that Minneapolis' sales by major market are: Market Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not
Assume that Minneapolis' sales by major market are: Market Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Net operating income Minneapolis $339,000 100% Medical $ 226,000 Dental 100% $113,000 100% 203,400 60% 144,640 64% 58,760 52% 135,600 40% 37,290 11% 29% $ 67,800 81,360 36% 13,560 6% 30x 54,240 48% 23,730 21% $ 30,510 27% 98,310 16,950 5% $ 81,360 24 % 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 $5.650. Marketing studies indicate that such a campaign would increase sales in the Medical market by $45,200 or increase sales in the Dental market by $39,550. 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? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 How much would the company's profits increase (decrease) if it implemented the advertising campaign in the Medical Market?
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