Raner, Harris, & Chan is a consulting firm that specializes in information systems for medical and dental clinics. The firm has two officesone in Chicago and one in Minneapolis. The firm classifies the direct costs of consulting jobs as variable costs.

Assume that Minneapolis sales by major market are:

					Market
	Minneapolis				Medical				Dental
Sales	$	810,000	100	%	$	540,000	100	%	$	270,000	100	%
Variable expenses		486,000	60	%		351,000	65	%		135,000	50	%
Contribution margin		324,000	40	%		189,000	35	%		135,000	50	%
Traceable fixed expenses		97,200	12	%		27,000	5	%		70,200	26	%
Market segment margin		226,800	28	%	$	162,000	30	%	$	64,800	24	%
Common fixed expenses not traceable to markets		24,300	3	%
Office segment margin	$	202,500	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 $10,800. Marketing studies indicate that such a campaign would increase sales in the Medical market by $94,500 or increase sales in the Dental market by $81,000.

Required:

1-a.

Calculate the increased segment margin for

Medical and Dental

1-b.

In which of the markets would you recommend that the company focus its advertising campaign?

	Medical
	Dental