Required Information SB Exercise 6-16 through Exercise 6-17 (Static) 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 Chicago $ 150,000 45.000 105.000 30.000 $ 27,000 Total Company 5.450,000 1003 225,000 SON 225,000 SO 126,000 283 99.000 224 of Cice Minneapolis 1000 $ 300,000 100% JO 180,000 603 708 120.000 403 520 49.000 5 72.000 24 Sales Variable expenses Contribution margin Traceable fixed expenses orice segment margin Connon fixed expenses not traceable to oficer Het operating Income 151 63.000 5 36,000 140 36 Exercise 6-17 (Static) Working with a Segmented Income Statement [L06-4) Assume that Minneapolis sales by major market are: Minneapoli $ 300,000 1000 110.000 120.000 Market Medioal Denta $ 250,000 1000 $ 100.000 1000 120.000 E 320 12.00 $80,000 25 27 300 $ 27.000 Sales Variable expenses Contribution margin Treceable tied expense Market segmentar Como ed esperto not aceable to the ottice contain 25+ 07.000 15.000 200 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 $5,000. Marketing studies indicate that such a campaign would increase sales in the Medical market by S40,000 or increase sales in the Dental market by $35,000 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 profits incrons (decrease if it mplemented the advertising campagn in the Dental Market 3. In which of the markets would you recommend that the company focus its advertising campaign $ 72,000 Common Exod expenses not traceable to markets office segment margin The company would like to Intiate an intensive advertising campaign in one of the two market segments during the next month. The campaign would cost $5,000. Marketing studies indicate that such a campolgn would increase sales in the Medical market by $40,00 or increase sales in the Dental market by $35,000 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? Complete this question by entering your answers in the tabs below. Required 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 profits Required 2) 29 Assume that Minneapolis' sales by major market are: Market Minneapolis Medical Dent Sales $ 300.000 100% $ 200,000 1004 $ 100,000 Vardable expenses 180.000 60 129,000 640 52,000 Contribution argen 120,000 40 72.000 362 48,000 Traceable fixed expenses 33,000 112 12.000 63 21,00 300 Market segment margin $ 60,000 87,000 $ 27.000 Connon fixed expenses not traceable to markets 15,000 3 office segment margin $ 72,000 247 The company would like to initiate an intensive advertising campaign in one of the two market segments during the nex campaign would cost $5,000. Marketing studies indicate that such a campaign would increase sales in the Medical man or increase sales in the Dental market by $35,000. Required: 1. How much would the company's profits increase (decrease) if it implemented the advertising campaign in the Medical 2. How much would the company's profits increase (decrease) if it implemented the advertising campaign in the Dental 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 2 Required 3 How much would the company's profits increase (decrease) if it implemented the advertising campaign in the Dental Market? Company's profits Sales Variable expenses Contribution margin Traceable cixed expenses Market segment margin Common ixed expenses not traceable to markets Olce segment margin Minneapolis $ 300,000 100% 180.000 605 120,000 40% 33,000 113 87,000 293 15.000 55 $72,000 243 Medical $ 200,000 100 128,000 64 72,000 36 12,000 6 $ 60,000 304 The company would like to initiate an Intensive advertising campaign In one of the two market segments campaign would cost $5,000. Marketing studies indicate that such a campaign would increase sales in th or Increase sales in the Dental market by $35,000. Required: 1. How much would the company's profits Increase (decrease) If it implemented the advertising campaign 2. How much would the company's profits increase (decrease) If It implemented the advertising campaign 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 In which of the markets would you recommend that the company focus its advertising campaign? Medical Dental