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

Total Company Office

Chicago Minneapolis

Sales $ $463,500100\%$ $ $154,500100\%$ $ $309,000100\%$

Variable expenses $231,75050\%46,35030\%185,40060\%$

Contribution margin $231,75050\%108,15070\%123,60040\%$

Traceable fixed expenses $129,78028\%80,34052\%49,44016\%$

Office segment margin $101,97022\%$ $ $27,81018\%$ $ $74,16024\%$

Common fixed expenses not traceable to offices $64,89014\%$

Net operating income $ $37,0808\%$

Assume that Minneapolis$$ sales by major market are:

Minneapolis Market

Medical Dental

Sales $ $309,000100\%$ $ $206,000100\%$ $ $103,000100\%$

Variable expenses $185,40060\%131,84064\%53,56052\%$

Contribution margin $123,60040\%74,16036\%49,44048\%$

Traceable fixed expenses $33,99011\%12,3606\%21,63021\%$

Office segment margin $89,61029\%$ $ $61,80030\%$ $ $27,81027\%$

Common fixed expenses not traceable to offices $15,4505\%$

Net operating income $ $74,16024\%$

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 $$5,150.$ Marketing studies indicate that such a campaign would increase sales in the Medical market by $$41,200$ or increase sales in the Dental market by $$36,050.$

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?

R$1$: company's profit: $\_\_\_\_\_\_\_\_\_\_\_\_\_$ by$\_\_\_\_\_\_\_\_\_\_\_\_\_$

R$2$: Company's profits:$\_\_\_\_\_\_\_\_\_\_\_\_$by$\_\_\_\_\_\_\_\_\_\_\_\_$

R$3$: Medical:$\_\_\_\_\_\_$ Dental:$\_\_\_\_\_\_\_$