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Raner, Harris & Chan is a consulting firm that specializes in information systems for medical and dental clinics. The firm has two offices -one in
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 $780,000 100% $520,wee 100% $260, 680 100% 468, 60% 338,eee 65% 139, 50% 312,880 40% 182,880 35% 139, eee 50% 93,600 12% 26,000 5% 67,689 26% 218,400 28% $156,800 30% $ 62,400 24% Sales Variable expenses Contribution margin Traceable fixed expenses Market segment margin Common fixed expenses not traceable to markets Office segment margin References 23,400 $195,eee 3% 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 $10.400. Marketing studies indicate that such a campaign would increase sales in the Medical market by $91,000 or increase sales in the Dental market by $78,000. 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. I T IS Tease (decrease) ir it implemented the advertising campaiUH ITU UUTILA Marneu! 3. In which of the markets would you recommend that the company focus its advertising campaign? Print References 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 Required 1 Required 2 > eBook 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? Print References 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 Dental Market? Company's profits by Required 1 Required 3 > , U C esares e TITOIRE Uy Tovuu. eBook Print 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? References 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? Medical O Dental
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