Required information SB Exercise 6-16 through Exercise 6-17 (Algo) [The following information applies to the questions displayed below.) 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: Total Company $ 100.00% 463,500 231,750 50.00% 231,750 50.00% 129,780 28.00% Office Chicago Minneapolis $ $ 100.00% 100.00% 154,500 309,000 46, 350 30.00% 185,400 60.00% 108, 150 70.00% 123,600 40.00% 80, 340 52.00% 49,440 16.00% Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices 101,970 22.00% $ 27,810 18.00% $ 74,160 24.00% 14.00% 64,890 $ 37,080 Net operating income 8.00% Exercise 6-17 (Algo) Working with a Segmented Income Statement [LO6-4) Assume that Minneapolis' sales by major market are: Sales Variable expenses Contribution margin Traceable fixed expenses Market Minneapolis Medical Dental $ $ 100.00% 100.00% 100.00% 309,000 206,000 103,000 185,400 60.00% 131,840 64.00% 53,560 52.00% 123,600 40.00% 74,160 36.00% 49,440 48.00% 33,990 11.00% 12,360 6.00% 21,630 21.00% 89,610 29.00% 30.00% 27.00% 61,800 27,810 Market segment margin Common fixed expenses not traceable to markets 15,450 $ 74,160 5.00% 24.00% Office segment margin 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 $5,150. Marketing studies indicate that such a campaign would increase sales in the Medical market by $41,200 or increase sales in the Dental market by $36,050. 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. Required Required Required 1 2 3 How much would the company's profits increase (decrease) if it implemented the advertising campaign in the Medical Market? Company's profits by Complete this question by entering your answers in the tabs below. Required Required Required 1 2. 3 How much would the company's profits increase (decrease) if it implemented the advertising campaign in the Dental Market? Company's profits by Complete this question by entering your answers in the tabs below. Required Required Required 1 2 3 In which of the markets would you recommend that the company focus its advertising campaign? O Medical Dental
