Office Total Company Sales $ 450,000 100% Chicago $ 150,000 Minneapolis 100% $ 300,000 100% Variable expenses 225,000 50% 45,000 30% 180,000 60% Contribution margin 225,000 50% Traceable fixed expenses 126,000 28% 105,000 78,000 70% 120,000 40% 52% 48,000 16% Office segment margin 99,000 22% $ 27,000 18% 9 $ 72,000 24% Common fixed expenses not traceable to offices 63,000 14% Net operating income $ 36,000 8% xercise 6-17 (Static) Working with a Segmented Income Statement [LO6-4] ssume Minneapolis's 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 $ 300,000 100% 180,000 60% 120,000 40% 33,000 11% 87,000 29% 15,000 5% $ 72,000 24% $ 60,000 Medical $ 200,000 100% 128,000 64% 72,000 36% 12,000 6% 30% $ 100,000 Dental 100% 52,000 52% 48,000 48% 21,000 21% $ 27,000 27% The company is planning a $5,000 advertising campaign next month in either the Medical or Dental market. Marketing studies indicate this campaign would increase Medical market sales by $40,000 or Dental market sales by $35,000. Required: 1. How much would the company's profits increase (decrease) if it advertised in the Medical market? 2. How much would the company's profits increase (decrease) if it advertised in the Dental market? 3. Should the company advertise in the Medical or Dental market?