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 Medical Sales Variable expenses Contribution margin Market segment margin 180,000 60% Traceable fixed expenses 120,000 40% 36,000 128 84,000 288 $300,000 100% $200,000 100% 130,000 656 70,000 35 10,000 SW Dental $100,000 100% 50,000 50% 50,000 26,000 26 50% $ 60,000 30% $ 24,000 24% Common fixed expenses not traceable to markets 9,000 34 $ 75,000 25% office segment margin 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 $4,000. Marketing studies indicate that such a campaign would increase sales in the Medical market by $35,000 or increase sales in the Dental market by $30,000. 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?