Exercise 7-17 Working with a Segmented Income Statement [LO7-4) 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 segment margin Market Minneapolis Medical Dental $780,000 1008 $520,000 1001 $260,000 1000 468,000 608 338,000 650 130,000 500 312,000 400 182,000 130,000 SON 93.600 126 26,000 50 67,600 261 218,400 281 $156,000 308 S 62,400 240 23,400 $195,000 30 258 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 $10,400. Marketing studies indicate that such a campaign would increase sales in the Medical market by $91,000 or increase sales in the Dental market by $78,000 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 Required 2 > Exercise 7-17 Working with a Segmented Income Statement [L07-4) 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: Market Minneapolis Medical Dental $780,000 1001 $520,000 100$ $260,000 1008 468,000 600 338,000 651 130,000 500 312,000 405 182,000 130,000 50 93.600 120 26.000 56 67,600 268 218,400 288 $156,000 300 $ 62,400 248 mt Sales Variable expenses Contribution margin Traceable fixed expenses Market segment margin Common fixed expenses not traceable to markets office segment margin 35 ences 23,400 $195,000 38 25 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 $10,400. Marketing studies indicate that such a campaign would increase sales in the Medical market by $91,000 or increase sales in the Dental market by $78,000. 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 Required 1 Required 3 >