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: Sales Variable expenses Contribution margin Traceable fixed expenses Office negment margin Common fixed expensen not traceable to office Net operating income Total Company 8454,500 100.00+ 227,250 50.00 227,250 50.00 127,260 28.000 22.00 Office Chicago Minneapoli $ 151, 500 100.000 303,000 100.000 45, 450 30.000 181,800 60.00 106,050 70.00 121,200 40.000 78,780 52.00% 49,480 16.00 $ 27,270 18.000 $ 72,720 24.009 63, 630 9:36, 360 1.000 1.00 Exercise 6-17 (Algo) Working with a Segmented Income Statement (L06-4) Assume that Minneapolis' sales by major market are: saloo Variable experien Contribution margin acoubla tixod expensen Market segment orgin Common fixed expenses not tracicable to market Ortle Bount margin Minneapolis 3 303,000 100.00 181,800 60.00 121,200 40.000 33,330 11.00 87.870 29.004 Market Medical Chantal 3. 202,000 100.00 101.000 10000 129,200 61.004 52.520 52,00 72,720 36.000 48,480 40.000 12.120 6.004 21.210 21.00 6.60, 600 30.000 27,270 27.00 15,150 5726720 5.000 24.000 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 $5.050. Marketing studies indicate that such a campaign would increase sales in the Medical market by $40,400 or increase sales in the Dental market by $35,350. 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 Regled Required 2 > 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) ir it implemented the advertising campaign in the Dental Market? Company's profits by Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 In which of the markets would you recommend that the company focus its advertising campaign? O Medical O Dental