Required information SB Exercise 7-16 through Exercise 7-17 (Algo) [The following information applies to the questions displayed below) Roner, 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 Variable expenses Cootribution margin Traceste fixed expenses office ont marcin Common fixed expenses not traceable to offices met operating income Total Conday 3.459.000 100% S 226,500 50 1253 23 99,660 223 6), 145 $36,200 Office Chicano Pineapolis $ 151,500 1001 $03,500 toos 45,450 180,900 106,050 120,00 406 25700 52% $ 27,770 18 572,160 42 11 Exercise 7-17 (Algo) Working with a Segmented Income Statement (L07-4) Assume that Minneapolis sales by major market are: Variable expenses Contribution margin Traceable fixed expenses Office segment margin Conton fixed expenses not traceable to offices Net operating income 100% 52 Minneapolis $ 301,500 100% 180.900 60% 120,000 40% 48,240 72,360 24 15,000 53 $57,360 19 Market Dent 100% $102,000 641 53.040 36% 18,966 6X 21.420 303 $ 27,540 Media $ 202,000 129280 72, 720 12,120 5.60,600 16% 21% 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 $5,500. Marketing studies indicate that such a campaign would increase sales in the Medical market by $41,000 or increase sales in the Dental market by $36,500. 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? 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) fit implemented the advertising campaign in the Medical Market? Company profits by Required 2 > Required: 1. How much would the company's profits increase (decrease) ir 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 profits
