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: Sales Variable expenses Contribution margin Traceable fixed expenses office segment margin Common fixed expenses not traceable to offices Net operating income Total Company $ 531,00 100.00% 265,500 50.00 265,500 50.00% 148,680 28.00% 116,820 22.eek office Chicago Minneapol $ 127,000 100.eex $ 354,00 109. 53.100 30.00% 212,400 60.00 123,900 70.00 141,600 40,001 92,040 52.00% 56,640 16.ee $ 31,860 18.eex $ 84,960 24.00 74,140 $ 42,480 14.00 8. Algo) Working with a Segmented Income Statement (L06-4) 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 Segnent margin Minneapolis $ 354,800 100.00% 212,400 6e.cox 141,600 40.00% 38,940 11.Box 182,660 29.60 17,700 5.00 $ 84,960 24.0 Market Medical Dental $ 236,eee 180.00 5 118,000 100.00% 151,040 64.00 61, Me 52.00 84,960 36.eex 56,640 48. 14, 160 6.00 24,70 21.00% $ 7,809 30. $ 31.868 27.005 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 $5.900 Marketing studies indicate that such a campaign would increase sales in the Medical market by $47200 or increase sales in the Dental market by $41,300. 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) ir 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 1 Required 2 Required 3 aceste Taxed expenses Market segment margin Como Fixed expenses not traceable to markets office segment margin 38,940 102,660 17,700 $ 84,960 14,160 5.20,500 11.00% 29.00 5.00% 24.00% 6.Box 30.00% 24,780 $ 31,860 40.00 21.ee 27.60 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 $5.900. Marketing studies indicate that such a campaign would increase sales in the Medical market by $47200 or increase sales in the Dental market by $41,300 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 1 Required 2 Required 3 How much would the company's profits increase (decrease) if it implemented the advertising campaign in the Medical Market? Company's pot Required 2 > 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 $5,900. Marketing studies indicate that such a campaign would increase sales in the Medical market by $47,200 or increase sales in the Dental market by S41,300 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 1 Required 2 Required 3 How much would the company's profits increase (decrease) if it implemented the advertising campaign in the Dental Market? Company's
