Raner, Harris, & Chan is a consulting firm that specializes in information systems for medical and dental clinics. The firm has two officesone 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:

					Market
	Minneapolis	Medical	Dental
Sales	$	300,000	100	%	$	200,000	100	%	$	100,000	100	%
Variable expenses		180,000	60	%		128,000	64	%		52,000	52	%
Contribution margin		120,000	40	%		72,000	36	%		48,000	48	%
Traceable fixed expenses		33,000	11	%		12,000	6	%		21,000	21	%
Market segment margin		87,000	29	%	$	60,000	30	%	$	27,000	27	%
Common fixed expenses not traceable to markets		15,000	5	%
Office segment margin	$	72,000	24	%

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-a.	Calculate the increased segment margin.
	Medical Dental Increased segment margin