Raner, Harris and 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: Sales Variable expenses Contribution margin Traceable fixed expenses office segment margin Common fixed expenses not traceable to offices Net operating income Total Company $ 495,000 100% 247.500 50% 247,500 sex 138,600 28% 100,900 22% 69,300 14% $ 39,600 8% office Chicago Minneapolis $ 165,000 100% $ 330,000 100% 49,500 30x 198,000 60% 115,500 78% 132,000 40% 85,800 52% 52,809 16% $ 29,700 18% $ 79,200 24% kercise 7-17 (Algo) Working with a Segmented Income Statement (L07-4) sume that Minneapolis' sales by major market are Market Minneapolis Medical Sales Dental $ 330,000 100% $ 220,000 100% Variable expenses $ 110,000 100% 198.000 60 140, 800 64% Contribution margin 57,200 52% 132,000 40% 79,200 363 Traceable fixed expenses 52,800 48% 36,300 12% 13200 6 23,100 21% office spent margin 95,700 20% 5.66,000 30% 529,700 27% Common fixed expenses not traceable to offices 16,500 SN Net operating income $ 79,200 24 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 $5.500 Marketing studies indicate that such a campaign would increase sales in the Medical market by $44,000 or increase sales in the Dental market by $38.500 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 campaian Required 1 Required 2 Required 3 How much would the d&mpany's profits increase (decrease) if it implemented the advertising campaign in the Medical Market? Company's profits by Required 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 polis