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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

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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 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: Sales Variable expenses Contribution margin Traceable fixed expenses Market segment margin Common fixed expenses not traceable to markets Office segment margin Market Minneapolis Medical Dental $750,000 1008 $500,000 1008 $250,000 1000 450,000 600 325,000 658 125,000 508 300,000 406 175,000 356 125,000 508 90,000 126 25,000 58 65,000 260 210,000 288 $150,000 308 $ 60,000 246 22,500 $187,500 256 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 $10,000. Marketing studies indicate that such a campaign would increase sales in the Medical market by $87,500 or increase sales in the Dental market by $75,000. 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

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