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: ed Minneapolis 660,000 1008 $440,000 1008 $220,000 1008 396,000 60 286,000 658 110,000 50 264,000 408 154,000 358 110,000 50 79,200 12t 22,000 51 57,200 268 184,800 28% $132,000 30% $52,800 24% Medical Dental Sales Variable expenses Contribution margin Traceable fixed expenses Market segnent margin Common fixed expenses not traceable to markets office segment margin 19,800 38 $165,000 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 $8,800. Marketing studies indicate that such a campaign would increase sales in the Medical or increase sales in the Dental market by $66,000. Required How much would the company's profits increase (decrease) if t implemented the advertising campaign in the Medical Market? fits 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? Prev1 of 3 Next>