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 $ 495,00 100% 255,000 50% 240, eee 50% 132,000 28% 108,000 22% 79,5ee 14% $ 37,580 8% Office Chicago Minneapolis $ 172,500 100% $ 322,50 1% 60,000 30% 193, see 60% 112, see 70% 129, eee 40% 81, e80 52% 51,600 16% $ 31,580 18% $ 77,480 24% 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 $ 322,5ee 100% 193,500 60% 129, eee 40% 51,600 16% 77,400 24% 15, eee 5% $ 62,400 19% Market Medical Dental $ 230, eee 100% $ 130, eee 100% 135,500 64% 59,500 52% 94,500 36% 70,500 48% 15, eee 28,500 21% $ 79,500 30% $ 42,00 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 $12,500. Marketing studies indicate that such a campaign would increase sales in the Medical market by $55,000 or increase sales in the Dental market by $57,500. 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? 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 > 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 2 Required 3 In which of the markets would you recommend that the company focus its advertising campaign? Medical Dental
