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 Dental Sales Variable expenses $540,000 324,000 Contribution margin 216,000 Traceable fixed expenses Market segment margin 151,200. 100% $360,000 100% $180,000 60% 234,000 658 90,000 50% 408 126,000 358 90,000 50% 64,800 128 18,000 58 46,800 268 28% $108,000 30% $ 43,200 100% 24 Common fixed expenses not traceable to markets office segment margin 16,200 38 $135,000 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 $7,200. Marketing studies indicate that such a campaign would increase sales in the Medical market by $63,000 or increase sales in the Dental market by $54,000. 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?