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Raner, Harris & Chan is a consulting firm that specializes in information systems for medical and dental clinics. The firm has two offices -one in

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Raner, Harris & 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: Assume that Minneapolis' sales by major market are: Market Minneapolis 300,000 180,000 Dental Medical 100% Sales 100% 100,000 52,000 100% 200,000 Variable expenses Contribution margin Traceable fixed expenses 60% 128,000 72,000 12,000 64% 52% 40% 48% 36% 48,000 120,000 6% 21% 33,000 11% 21,000 Market segment margin $ 60,000 $ 27,000 30% 27% 29% 87,000 5% Common fixed expenses not traceable to markets 15,000 Office segment margin $ 72,000 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 $5,000. Marketing studies indicate that such a campaign would increase sales in the Medical market by $40,000 or increase sales in the Dental market by $35,000 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

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