Salon Variable expenses Contribution margin Traceable fixed expense ottice wegment margin Common fixed expenses not traceable to offices Net operating incom Total Company $ 454,500 1000 227,250 508 227.250 500 127,260 99,990 226 63,630 140 $36,360 BE Office Chicago Minneapoli $ 151,500 1000 $ 303,000 1000 45,450 308 181,800 608 106,050 700 121,200 400 28,780 524 40,480 168 $ 27,270 180 $ 72,720 244 Exercise 7-17 (Algo) Working with a Segmented Income Statement (L07-4) Assume that Minneapolis' sales by major market are: Market Minneapolis Medical Dental Balan 303,000 1000 $ 202,000 100 $ 101,000 1009 Variable expenses 1R1,000 600 129,200 52,520 520 Contribution margin 121,200 405 72, 720 361 48,480 Traceable fixed expenses 33,330 118 12,120 21,210 211 office segment margin 87,870 294 $. 60.600 $ 27,270 271 Common fixed expenses not traceable to ottico 15,150 54 Net operating income $ 72,720 24 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 $5,050. Marketing studies indicate that such a campaign would increase sales in the Medical market by $40,400 or increase sales in the Dental market by $35,350. 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