How much would the company's profits increase (decrease) if it implemented the advertising campaign in the Medical Market?

How much would the company's profits increase (decrease) if it implemented the advertising campaign in the Dental Market?

Required information SB Exercise 6-16 through Exercise 6-17 (Algo) [The following information applies to the questions displayed below.] Raner, Harris & Chan is a consulting firm that specializes in information systems for medical and dental clinics. The firm has two officesone 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: Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Net operating income Total Company $ 472,000 100% 234,900 50% 237,100 50% 133,480 28% 103,620 22% 66,080 14% $ 37,540 8% Office Chicago Minneapolis $ 161,000 100% $ 311,000 100% 48,300 30% 186,600 60% 112,700 70% 124,400 40% 83,720 52% 49,760 16% $ 28,980 18% $ $ 24% 74,640 Exercise 6-17 (Algo) Working with a Segmented Income Statement [LO6-4] 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 Minneapolis $ 311,000 100% 186,600 60% 124,400 40% 34,210 11% 90, 190 29% 15,550 5% $ 74,640 24% Market Medical Dental $ 222,000 100% $ 122,000 100% 142,080 64% 63,440 52% 88,500 36% 58,560 48% 13,320 6% 25,620 21% $ 66,600 30% $ 32,940 27% 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 $10,500. Marketing studies indicate that such a campaign would increase sales in the Medical market by $51,000 or increase sales in the Dental market by $51,500. 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