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Required information [The following information applies to the questions displayed below) Raner, Harris & 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 400 Total Company $ 510,000 1001 255,000 508 255,000 508 142,800 284 112,200 220 71,400 145 $ 40,800 88 Office Chicago Minneapolis $ 180,000 100 $ 330,000 1000 54,000 304 198,000 608 126,000 700 132,000 93,600 52 52,800 166 $ 32,400 188 $ 79,200 240 By how much would the company's net operating income increase if Minneapolis increased its sales by $85,000 per year? ssume no change in cost behavior patterns let operating income increase Required information [The following information applies to the questions displayed below.) Raner, Harris & 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 $ 510,000 1001 255,000 500 255,000 505 142,800 280 112,200 225 71,400 140 $ 40,800 81 Office Chicago Minneapolis $ 180,000 1008 $ 330,000 1008 54,000 301 198,000 602 126,000 705 132,000 408 93,600 524 52,800 160 $ 32,400 185 $ 79,200 240 Assume that Minneapolis' sales by major market are: Sales Variable expenses Contribution margin Traceable fixed expenses office segment margin Common fixed expenses not traceable to offices Net operating income Minneapolis $ 330,000 1001 198.000 604 132,000 408 52,800 160 79,200 240 15,000 52 $ 64,200 19. Market Medical Dental $ 240,000 1001 $ 140,000 1000 153,600 640 72,800 525 86,400 360 67,200 480 14.400 29.400 210 $ 72,000 300 $ 37.800 278 Required information OU JO 60 308 14,400 $ 72,000 VA 29,400 $ 37,800 YON 215 278 4.VUU 52,800 168 79,200 240 15,000 5 $ 64,200 19 + LLLL LUULAUI MOLY Traceable fixed expenses office segment margin Common fixed expenses not traceable to offices Net operating income 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 $15,000. Marketing studies Indicate that such a campaign would increase sales in the Medical market by $60,000 or increase sales in the Dental market by $65,000. 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. es 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 The company would like to initiate an intensive advertising campaign in one of the two market segments during the next month. T campaign would cost $15,000. Marketing studies indicate that such a campaign would increase sales in the Medical market by $60,000 or increase sales in the Dental market by $65,000. 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 Required: 1. How much would the company's profits increase (decrease) if it implemented the advertising campaign in the Me 2. How much would the company's profits increase (decrease) if it implemented the advertising campaign in the De 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 ad 1 Required 2 Required 3 In which of the markets would you recommend that the company focus its advefsing campaign? Medical O Dental

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