Exercise 6-17 Working with a Segmented Income Statement [Lo6-4] Raner, Harris & Chan is a consulting firm that speclalizes 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: Market Minneapolis Medical Dental Sales Variable expenses Contribution marg Traceable fixed expenses Market segment margin Common fixed expenses not traceable to markets Office segment margin $570,000 1008 $380,000 100 $190,000 1008 95,000 50a 342,000 609 247,000 65% 228,000 40% 133,000 35% 95,000 50 49,400 26 159,600 289 $114,000 309 $45,600 24 68,400 123 19,000 $142,500 25% The company would like to initlate 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) f 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