SB Exercise $7-16$ through Exercise $7\mathrm{.}17($Static$)$

$[$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:

Exercise $7-17($Static$)$ Working with a Segmented Income Statement $[$LO$7-4]$

Assume that Minneapolis' sales by major market are:

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 $$5\mathrm{.}000.$ Marketing studies indicate that such a campaign would increase sales in the Medical market by $$40\mathrm{.}000$

or increase sales in the Dental market by $$35\mathrm{.}000.$

Requlred:

How much would the company's protits increase $($decrease$)$ If it implemented the advertising campaign in the Medical Market?

How much would the company's profits increase $($decrease$)$ if it implemented the advertising campaign in the Dental Market?

In which of the markets would you recommend that the company focus its advertising campaign?

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Required

How much would the company's profits increase $($decrease$)$ if it implemented the advertising campaign in the Medical Market?

Company's prokits

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How much would the company's profits increase $($decrease$)$ if it implemented the advertising campaign in the Dental Market?

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Required $1$

In which of the markets would you recommend that the company focus its advertising campaign?