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Raner, Harris and Chan is a consulting firm specializing in information systems for medical and dental clinics. The firm has two offices-one in Chicago and
Raner, Harris and Chan is a consulting firm specializing in information systems for medical and dental clinics. The firm has two offices-one in Chicago and one in Minneapolis. It 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 below: Assume Minneapolis's sales by major market are: The company is planning a $5,650 advertising campaign next month in either the Medical or Dental market. Marketing studies indicate this campaign would increase Medical market sales by $45,200 or Dental market sales by $39,550. 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
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