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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

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.

Assume that Minneapolis' sales by major market are as follows:
Market
Minneapolis Medical Dental
Sales $480,000 100% $320,000 100% $160,000 100%
Variable expenses

288,000

60%

208,000

65%

80,000

50%

Contribution margin 192,000 40% 112,000 35% 80,000 50%
Traceable fixed expenses

57,600

12%

16,000

5%

41,600

26%

Market segment margin 134,400 28%

$96,000

30%

$38,400

24%

Common fixed expenses
not traceable to markets
14,400 3%
Office segment margin

$120,000

25%


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 $6,400. Marketing studies indicate that such a campaign would increase sales in the Medical market by $56,000 or increase sales in the Dental market by $48,000.


Required:

Determine the increase in net operating income in each market if the advertising campaign were to be initiated in that market. (Omit the "$" sign in your response.)


Medical Dental
Increase in net operating income $ $

**Can somebody please answer and show how the answer was gotten so I can go back and figure out where I went wrong, that would be great!

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