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ronces Required information The following information applies to the questions displayed below.) Raner, Harris and Chan is a consulting firm that specializes in information
ronces 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 Variabis Contribution margin Traceable fixed expenses office segment margin. Common fixed expenses not traceable to offices Het operating Income office Minneapolis $348,000 100% Total Company 5 522,000 100 261,000 506 261,000 50% 146,160 281 Chicago $174,000 100 52,200 30 208,800 60 121,800. 70% 139,200 40% 90,480 52 55,680 169 114,840 22 73,080 149 $ 41,760 8N $ 31,320 18% $ 83,520 249 Assume that Minneapolis' sales by major market are: Cales Variable expenses Contribution margin Traceable fixed expenses office segment margin Common fixed expenses not traceable to offices Bet operating income Market Minneapolis $348,000 100% 208,800 60% 139,200 40% 38,280 119 100,920 296 17,400 51 Medical S232,000 100% 64% 148,480 83,520 369 13.920 68 30% $ 69,600 Dental $ 116,000 60,320 100% 528 55,680 48 24,360 $ 31,320 21 27 $ 83,520 24 N The company would like to initiate on 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.
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