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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 $660,000 100 $440,000 1000 $220,0001008 396.000 608 286,000 658 110,000 500 264,000 400 154,000 358 110.000 505 79,200 125 22,000 58 57,200 266 184,800 284 $132,000 301 $ 52,800 245 19,800 $165,000 35 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 $8,800. Marketing studies indicate that such a campaign would increase sales in the Medical market by $77,000 or increase sales in the Dental market by $66,000. Required: 1. How much would the company's profits increase (decrease) i 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? LOWO not traceable to markets Office segment margin 19,800 $165,000 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 $8,800. Marketing studies indicate that such a campaign would increase sales in the Medical market by $77,000 or increase sales in the Dental market by $66,000. 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 > AWA not traceable to markets Office segment margin 19,800 $165,000 38 25$ 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 $8,800. Marketing studies indicate that such a campaign would increase sales in the Medical market by $77,000 or increase sales in the Dental market by $66,000. 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 3 Required 1 Required 2 How much would the company's profits increase (decrease) if it implemented the Ldvertising campaign in the Dental Market? Company's profits by Exercise 7-5 Companywide and Segment Break-Even Analysis (L07-5) Piedmont Company segments its business into two regions--North and South. The company prepared the contribution format segmented income statement as shown: Sales Variable expenses Contribution margin Traceable fixed expenses Segment margin Common fixed expenses Net operating income Total Company $ 937.500 637,500 300,000 142,000 158,000 62,000 $ 96,000 North $ 750,000 600,000 150,000 71,000 $ 79,000 South $ 187,500 37,500 150,000 71,000 $79.000 Required: 1. Compute the companywide break-even point in dollar sales. 2. Compute the break-even point in dollar sales for the North region. 3. Compute the break-even point in dollar sales for the South region. (For all requirements, round your intermediate calculations to 2 decimal places. Round your final answers to the nearest dollar) 1. Dollar sales for company to break-even 2. Dollar sales for North segment to break-even 3. Dollar sales for South segment to break-even
