Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Net operating income Total Company $ 486,000 100.00% 243,000 50.00% 243,000 50.00% 136,080 28.00% 106,920 22.00% ULLICE Chicago Minneapolis $ 162,000 100.00% $ 324,000 100.00% 48,600 30.00% 194,400 60.00% 113,400 70.00% 129,600 40.00% 84,240 52.00% 51,840 16.00% $ 29,160 18.00% $ 77,760 24.008 68,040 $ 38,880 14.00% 8.00% 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 $ 324,000 100.00% 194,400 60.00% 129,600 40.00% 35,640 11.00% 93,960 29.00% Market Medical Dental $ 216,000 100.00% $ 108,000 100.00% 138,240 64.00% 56,160 52.00% 77,760 36.00% 51,840 48.00% 12,960 6.00% 22,680 21.008 $ 64,800 30.00% $ 29,160 27.008 16,200 $ 77,760 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 campaign would cost $5,400. Marketing studies indicate that such a campaign would increase sales in the Medical market by $43,200 or increase sales in the Dental market by $37,800. 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? O Medical Dental Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Net operating income Total Company $ 486,000 100.00% 243,000 50.00% 243,000 50.008 136,080 28.00% 106,920 22.00% Office Chicago Minneapolis $ 162,000 100.00% $ 324,000 100.00% 48,600 30.00% 194,400 60.00% 113,400 70.008 129,600 40.00% 84,240 52.00% 51,840 16.00% $ 29,160 18.00% $ 77,760 24.008 68,040 $ 38,880 14.00% 8.00% 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 $ 324,000 100.00% 194,400 60.00% 129,600 40.00% 35,640 11.00% 93,960 29.008 Market Medical Dental $ 216,000 100.008 $ 108,000 100.00% 138,240 64.008 56,160 52.00% 77,760 36.00% 51,840 48.00% 12,960 6.00% 22,680 21.00% $ 64,800 30.00% $ 29,160 27.00% 16, 200 $ 77,760 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 $5,400. Marketing studies indicate that such a campaign would increase sales in the Medical market by $43,200 or increase sales in the Dental market by $37,800. 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 Dental Market? Company's profits by 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 Total Company $ 486,000 100.00% 243,000 50.00% 243,000 50.00% 136,080 28.00% 106,920 22.00% Office Chicago Minneapolis $ 162,000 100.00% $ 324,000 100.00% 48,600 30.00% 194,400 60.00% 113,400 70.00% 129,600 40.00% 84,240 52.008 51,840 16.00% $ 29,160 18.00% $ 77,760 24.00% 68,040 $ 38,880 14.008 8.00% 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 $ 324,000 100.00% 194,400 60.00% 129,600 40.00% 35,640 11.00% 93,960 29.00% Market Medical Dental $ 216,000 100.00% $ 108,000 100.00% 138,240 64.008 56,160 52.00% 77,760 36.00% 51,840 48.00% 12,960 6.008 22,680 21.00% $ 64,800 30.00% $ 29,160 27.00% 16,200 $ 77,760 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 campaign would cost $5,400. Marketing studies indicate that such a campaign would increase sales in the Medical market by $43,200 or increase sales in the Dental market by $37,800. 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
