! Required information (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 $ 522,000 100.00 261,000 50.008 261,000 50.00% 146,160 28.00% 114,840 22.00% office Chicago Minneapolis $ 174,000 100.008 $ 348,000 100.00% 52,200 30.00% 208,800 60.00% 121,800 70.00% 139,200 40.00% 90,480 52.00% 55,680 16.00% $ 31,320 18.008 $ 83,520 24.008 14.008 73,080 $ 41,760 8.008 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 segment margin Minneapolis $ 348,000 100.00% 208,800 60.00% 139,200 40.00% 38,280 11.00% 100,920 29.008 Market Medical Dental $ 232,000 100.00% $ 116,000 100.008 148,480 64.00% 60, 320 52.00% 83,520 36.008 55,680 48.008 13,920 6.00% 24,360 21.00% $ 69,600 30.00% $ 31,320 27.008 17,400 $ 83,520 5.00% 24.00% The company would like to initiate an intensive advertising campaign in one of the two market segments during the next month. The 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 segment margin Minneapolis $ 348,000 100.008 208,800 60.008 139,200 40.008 38,280 11.008 100,920 29.008 Market Medical Dental $ 232,000 100.00% $ 116,000 100.00% 148, 480 64.00% 60,320 52.008 83,520 36.008 55,680 48.00% 13,920 6.00% 24,360 21.008 $ 69,600 30.00% $ 31,320 27.00% 17,400 $ 83,520 5.00% 24.008 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 $5,800. Marketing studies indicate that such a campaign would increase sales in the Medical market by $46,400 or increase sales in the Dental market by $40,600. 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
