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[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

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[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 Variable expenses Contribution margin Traceable fixed expenses office segment margin Common fixed expenses not traceable to offices Net operating income Total Company $ 454,500 100.00% 227,250 50.00% 227, 258 58.89% 127,260 28.80% 99,999 22.00% Office Chicago Minneapolis $ 151,5ee 100.ee $ 303,608 1ea.ee 45,452 38.sex 181,888 60.ee% 186,85e 70.ees 121,200 4e.ee% 78,789 52.00% 48,480 16.8% $ 27,270 18.ee $ 72,720 24.ee 63,630 $ 35, 360 14.89% 8.00% Exercise 6-17 (Algo) Working with a Segmented Income Statement (LO6-4) Assume that Minneapolis' sales by major market are: Market Minneapolis Medical Dental Sales $ 303,000 100.eek $ 202,000 100.00% $ 101,00 180.no Variable expenses 181,800 50.ee 129,280 64.00% 52,520 52.00% Contribution margin 121,200 40.00% 72,720 36.99% 48,480 48.sex Traceable fixed expenses 33,330 11.00% 12,120 6.00% 21,210 21.00% Market segment margin 87,870 29.00% $ 60,680 30.00% $ 27,270 27.00% Common fixed expenses not traceable to markets 15,150 5.ee office segment margin $ 72,720 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 $5.050. Markeung 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? 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 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 O Dental

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