Check 5 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: ok Market Minneapolis Medical Dental $870,000 1000 $580,000 1000 $290,000 1000 522,000 600 377,000 651 145,000 500 348,000 408 203,000 356 145,000 508 104,400 124 29,000 51 75,400 260 243,600 288 $174,000 300 $ 69,600 240 ht Sales Variable expenses Contribution margin Traceable fixed expenses Market segment margin Common fixed expenses not traceable to markets office segment margin nces 26,100 $217,500 38 250 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 $11,600. Marketing studies indicate that such a campaign would increase sales in the Medical market by $101,500 or increase sales in the Dental market by $87,000. 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 3 How much would the company's profits increase (decrease) if it implemented the advertising campaign in the Medical Market? Variable expenses Contribution margin Traceable fixed expenses Market segment margin Common fixed expenses not traceable to markets Office segment margin 522,000 348,000 104,400 243,600 603 409 128 288 377,000 203,000 29,000 $174,000 656 358 53 145,000 145,000 75,400 $ 69,600 508 508 263 245 308 26,100 $217,500 258 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 $11,600. Marketing studies indicate that such a campaign would increase sales in the Medical market by $101,500 or increase sales in the Dental market by $87,000. 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 3 How much would the company's profits increase (decrease) if it implemented the advertising campaign in the Medical Market? Company's profits by 30 Common fixed expenses not traceable to markets office segment margin 26,100 $217,500 258 DOK int ences 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 $11,600. Marketing studies indicate that such a campaign would increase sales in the Medical market by $101,500 or increase sales in the Dental market by $87,000. 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 3 How much would the company's profits increase (decrease) if it implemented the advertising campaign in the Dental Market? Company's profits by Variable expenses Contribution margin Traceable fixed expenses Market segment margin Common fixed expenses not traceable to markets office segment margin 522,000 348,000 104,400 243,600 600 377,000 403 203,000 128 29,000 288 $174,000 65% 358 58 308 145,000 145,000 75,400 $ 69,600 508 508 268 244 26,100 $217,500 38 258 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 $11,600. Marketing studies indicate that such a campaign would increase sales in the Medical market by $101,500 or increase sales in the Dental market by $87,000. 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 3 In which of the markets would you recommend that the company focus its advertising campaign? Medical Dental