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 $660,000 396,000 Medical Dental $440,000 286,000 154,000 $220,000 110,000 110,000 Sales 100% 100% 100% Variable expenses 65 % 60% 50% Contribution margin Traceable fixed expenses 264,000 79,200 408 35% 50% 12% 22,000 57,200 26% $ 52,800 Market segment margin $132,000 30% 24% 184,800 288 Common fixed expenses 19,800 38 not traceable to markets Office segment margin $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 market by $77,000 or increase sales in the Dental market by $66,000. 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