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 classifles the direct costs of consulting jobs as variable costs. A contribution format segmented income statement for the company's most recent year is given Total Company $ 450,000 1008 225,000 Sot 225,000 500 126,000 288 99,000 228 63,000 148 $ 36,000 88 Sales Variable expenses Contribution margin Traceable fixed expenses office segment margin Common fixed expenses not traceable to offices Net operating income office Chicago Minneapolis $ 150,000 1008 $ 300,000 1008 45,000 300 180,000 600 105,000 700 120,000 40 78,000 48,000 168 $ 27,000 $ 72,000 241 520 d ces Assume that Minneapolis' sales by major market are: Minneapolis $ 300,000 1000 180,000 601 120,000 400 33,000 118 87.000 294 15,000 58 $ 72.000 Sales Variable expenses Contribution margin Traceable fixed expenses Market segment margin Common fixed expenses not traceable to markets office segment margin Market Medical Dental $ 200,000 1000 $ 100,000 1008 120,000 640 52,000 520 72,000 368 48,000 408 12.000 60 21.000 214 $ 60,000 300 $ 27,000 274 The company would like to initiate an intensive advertising campaign in one of the two market segments during the next month. The I would cost $5000 Marketing studies indicate that such a campaian would increase sales in the Medical market by $40 000 UUMEM we 300 $ 60,000 $ 27,000 278 BU ACU AC Market segment margin Common fixed expenses not coable to markets office segment margin 87.000 15,000 $ 72,000 298 50 24N 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? 3. In which of the markets would you recommend that the company focus its advertising campaign? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 How much would the company's profits increase (decrease) if it implemented the advertising campaign in the Medical Market? Company's profits by Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 How much would the company's profits increase (decrease) if it implemented the advertising cam Company's profits by
