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Required information [The following information applies to the questions displayed below.] Raner, Harris and Chan is a consulting firm that specializes in information systems for
Required information [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 Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Net operating income Minneapolis $ 333,000 Office Total Company Chicago 100% $ 166,500 100% 49,950 30% 116,550 70% 86,580 52% $ 499,500 249,750 50% 249,750 50% 139,860 28% 109,890 22% 69,930 14% $ 39,960 8% $ 29,970 18% 100% 199,800 60% 133,200 40% 53,280 16% $ 79,920 24% 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 Minneapolis $ 333,000 100% 199,800 60% 133,200 40% 36,630 11% 96,570 29% 16,650 5 % $ 79,920 24 % $ 222,000 79,920 36% 13,320 6% Medical Market 100% 142,080 64% Dental $111,000 100% 57,720 52% 53,280 48% 23,310 21% $ 66,600 30% $ 29,970 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 $5,550. 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. Dequired. < Prev 13 of 16 Next > 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 In which of the markets would you recommend that the company focus its advertising campaign? Medical Dental
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