Required information SB Exercise 7-16 through Exercise 7-17 (Algo) [The following information applies to the questions displayed below.] Raner, Harris and 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 Office Total Company $ 486,000 243,000 50% 243,000 50% 136,080 28% 100% 106,920 22% 68,040 14% 8% Chicago $ 162,000 100% 48,600 30% 113,400 70% 84,240 $ 29,160 Minneapolis $ 324,000 100% 194,400 60% 129,600 40% 52% 18% 51,840 16% $ 77,760 24% Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Net operating income $ 38,880 Exercise 7-17 (Algo) Working with a Segmented Income Statement [LO7-4] Assume that Minneapolis' sales by major market are: Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Net operating income Market Minneapolis Medical Dental $ 324,000 100% 194,400 60% 129,600 40% 35,640 11% 93,960 29% 16,200 5 % $ 77,760 24 % $ 216,000 100% 138,240 64% $ 108,000 100% 56,160 52% 77,760 12,960 $ 64,800 36% 6% 30% 51,840 48% 22,680 21% $ 29,160 27% 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 $5,400. Marketing studies indicate that such a campaign would increase sales in the Medical market by $43,200 or increase sales in the Dental market by $37,800. 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 profits by < Required 1 Required 2 > 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 profits by < Required 1 Required 3 > 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 < Required 2 Required 3 >