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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 Connon fixed expenses not traceable to offices Net operating income Total Company $495,000 100% 255,000 Sex 240,000 50% 132,000 28% 108,000 22% 70,500 14% $ 37,500 8% Office Chicago Minneapolis $ 172,500 100% $ 322,500 1% 60,000 30% 193,500 60% 112,500 70% 129,800 40% 81,000 52x 51,600 16% $ 31,500 18% $ 77,400 24% Assume that Minneapolis' sales by major market are: Sales Variable expenses Contribution margin Traceable fixed expenses Market segnent margin Connon fixed expenses not traceable to markets Office segment margin Minneapolis $ 322,500 100% 193,500 60% 129,000 40 51,600 16% 77,400 15,000 SX $ 62,400 19% Market Medical Dental $ 230,000 100% $ 130,000 100% 135,500 59,500 52% 94,500 36% 70, 500 48% 15, Bae 6% 28. See 21% $ 79,500 30% $ 42,000 27% The company would like to initiate an intensive advertising campaian in one of the two market segments during the next month. The 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 $ 322,500 100% 193,500 60% 129,000 40% 51,600 16% 77,480 24% 15,000 5% $ 62,400 Market Medical Dental $ 230,000 100% $ 130,000 100% 135,5ee 64% 59,500 52% 94, see 36% 70,500 48% 15,000 6% 28,500 21% $ 79,500 30% $ 42,000 27% 19% 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 $12,500. Marketing studies indicate that such a campaign would increase sales in the Medical market by $55,000 or increase sales in the Dental market by $57,500. 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? Company's profits by (Required 1 Required 2 > Assume that Minneapolis' sales by major market are: Sales Variable expenses Contribution margin Traceable fixed expenses Market segment margin Conmon fixed expenses not traceable to markets Office segment margin Minneapolis $ 322,5ee 100% 193,500 602 129,000 40% 51,600 16% 77,400 24% 15,600 5% $ 62,400 19% Market Medical Dental 230,000 100% $ 130,000 100% 135,500 64% 59,500 52% 94,500 36% 70,500 48% 15,000 6% 28, 588 21% 79,500 30% $ 42,000 27% $ 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 $12,500. Marketing studies indicate that such a campaign would increase sales in the Medical market by $55,000 or increase sales in the Dental market by $57,500. 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 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 segnent margin 48% Market Medical Dental $ 230,00 100% $ 130,000 100x 135,500 64% 59,5ee 52% 94,500 36% 70,500 15,600 6% 28,500 212 $ 79,see 30% $ 42,eee 27% Minneapolis $ 322,580 100% 193,500 60% 129,080 40% 51,600 16% 77,400 24% 15,00 SX $ 62,400 19% 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 $12,500. Marketing studies indicate that such a campaign would increase sales in the Medical market by $55,000 or increase sales in the Dental market by $57,500. 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? Medical Dental

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