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: Sales Variable expenses Contribution margin Traceable fixed expenses Market segment margin Common fixed expenses not traceable to markets office segment margin Market Minneapolis $690,000 414,000 Medical Dental 100% 60% 276,000 40% 82,800 12% 58 $460,000 100% $230,000 100% 299,000 65% 115,000 50% 35 115,000 50% 59,800 26% 30% $55,200 249 161,000 23,000 193,200 28 $138,000 20,700 34 $172,500 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 $9,200. Marketing studies indicate that such a campaign would increase sales in the Medical market by $80,500 or Increase sales in the Dental market by $69,000. 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? 3. In which of the markets would you recommend that the company focus its advertising campaign?