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: Salen Variable expenses Contribution margin Traceable fixed expenses Office Segment margin Common fixed expenses not traceable to offices Net operating income Total Company $ 499,500 100 249.750 500 249,750 501 139,860 281 109,890 228 69,930 141 $ 39,960 8 office Chicago Minneapolis $ 166,500 100 $ 333,000 1001 49,950 301 199.800 608 116,550 705 133,200 408 86.580 521 53280 160 $ 29,970 181 $ 79,920 248 Exercise 7-16 Part 1 (Algo) Working with a Segmented Income Statement; Break-Even Analysis (L07-4, LO7-5) Required: 1-a. Compute the companywide break-even point in dollar sales. 1-b. Compute the break-even point for the Chicago office and for the Minneapolis office. 1-c. is the companywide break-even point greater than, less than or equal to the sum of the Chicago and Minneapolis break-even points? Complete this question by entering your answers in the tabs below. Show less Reg 1A Reg 1B Reg 10 Compute the companywide break-even point in dollar sales. (Round "CM ratio" to 2 decimal places and final answer to the nearest whole number.) Break-even point in dollar sales RIA Reg 1B > Complete this question by entering your answers in the tabs below. Show less es Req 1A Reg 18 Reg 10 Compute the break-even point for the Chicago office and for the Minneapolis office. (Round "CM ratio" to 2 decimal places ar final answer to the nearest whole number.) Break-even Point Chicago office Minneapolis office 25 Req 1A Reg 1B Reg 15 Is the companywide break-even point greater than, less than or equal to the sum of the Chicago and Minneapolis break-even points? Greater than Less than OEqual to Assume that Minneapolis' sales by major market are: Sales Variable expenses Contribution margin Traceable fixed expenses ortico segment margin Common fixed expenses not traceable to offices Net operating income Minneapolis $ 333,000 1001 199,800 608 133,200 400 36.630 114 96,570 291 16,650 55 $. 79,920 240 Market Medical Dental $ 222,000 1001 $ 111,000 1900 142,080 640 57,720 520 79.920 361 53,280 488 13320 23.310 211 $ 66,600 303 $ 29,970 271 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 $5,550 Marketing studies indicate that such a campaign would increase sales in the Medical market by $44.400 or increase sales in the Dental market by $38,850, 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 In which of the markets would you recommend that the company focus its advertising campaign? Medical Dental
