Raner, Harris and 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 Assume that Minneapolis' sales by major market are: Office Total Company Chicago $ 522,000 100% 261,000 50% $ 174,000 100% 52,200 30% Minneapolis $ 348,000 100% 208,800 60% 261,000 50% 146,160 28% 114,840 22% 73,080 14% 121,800 70% 90,480 52% 139,200 40% 55,680 16% $ 31,320 18% $ 83,520 24% $ 41,760 8% Market Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Net operating income Minneapolis $ 348,000 100% 208,800 60% 139,200 40% 38,280 11% 100,920 29% 17,400 5 % $ 83,520 24 % Medical $ 232,000 100% 148,480 64% 83,520 36% 13,920 6% 52% $ 116,000 100% 60,320 55,680 48% 24,360 21% Dental $ 69,600 30% $ 31,320 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 $5,800. Marketing studies indicate that such a campaign would increase sales in the Medical market by $46,400 or increase sales in the Dental market by $40,600. 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?