CACILISE - WUINITY WILIA BY ICL ITILOITICOLALEITICII [LUI 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 Assume that Minneapolis sales by major market are: Sales Variable expenses Contribution margin Traceable fixed expenses Market segnent margin Common fixed expenses not traceable to markets Office segment nargin Market Minneapolis Medical Dental $570,000 100% $380.000 100% $190,00 1eex 342,000 60% 247,000 65% 95, eee Sex 228.000 40% 133, see 35% 95,000 sex 68,400 12 19.ee 5% 49,400 26% 159.680 28* $114,00 30% $ 45,600 24% 17, 10e $142,500 3% 25% 7 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 $7,600. Marketing studies indicate that such a campaign would increase sales in the Medical market by $66,500 or increase sales in the Dental market by $57,000 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 How much would the company's profits increase (decrease) if it implemented the advertising campaign in the Medical Market? Company's pront by w 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 Assume that Minneapolis sales by major market are: Sales Variable expenses Contribution margin Traceable fixed expenses Market segment margin Common Fixed expenses not traceable to markets office serent margin Market Minneapolis Medical Dental $570, eee 100% $380,000 100% $190,000 100% 342,000 604 247,000 95,000 Sex 228, eee 40% 133,000 35% 95.000 50% 68,400 123 19. eee SX 49,40 26% 159,600 28% $114.000 3e $45.600 24 17,180 $142,500 25% The company would like to initiate an intensive advertising campaign in one of the two market segments during the next month. The campogn would cost $7600. Marketing studies indicate that such a campaign would increase sales in the Medical market by $66,500 or increase sales in the Dental market by $57000 Required: 1. How much would the company's profits increase (decrease) it implemented the advertising campaign in the Medical Market? 2. How much would the company's profits increase (decrease) fit 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 Required 2 Required a How much would the company's profits increase (decrease) if it implemented the advertising campaign in the Dental Market? Company's profis by CACILISE 1 VUIT WILL a ScyICIILCU HIILUIRE OLALEITICIIL LUI- 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 Assume that Minneapolis' sales by major market are: Sales Variable expenses Contribution margin Traceable fixed expenses Market segment margin Common fixed expenses not traceable to markets Office segnent margin Market Minneapolis Medical Dental $570,eee 100% $380,000 100x 5190,00 100x 342,000 6ex 247.ee 65% 95,000 50% 228, eee 40% 133,000 35% 95, eee sex 68,400 12% 19.000 52 49,400 26% 159,600 28% $114,000 38 545,600 24% 32 17,100 $142,500 254 s 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 $7,600 Marketing studies indicate that such a campaign would increase sales in the Medical market by $66,500 or increase sales in the Dental market by $57000 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 In which of the markets would you recommend that the company focus its advertising campaign? Medical Dental
