Exercise 7-17 Working with a Segmented Income Statement (L07-4) 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 Assume that Minneapolis' sales by major market are: Sales Variable expenses Contribution margin Traceable fixed expenses Market segnent margin Common fixed expenses not traceable to markets Office segment margin Market Minneapolis Medical Dental $690,986 100% $460,000 100% $230,000 100% 414,000 60% 299,000 65% 115,000 50% 276,000 401 161,000 35% 115,000 Sex 82,800 12% 23,000 5% 59,800 265 193,200 28% $138,000 30% $ 55,200 24% 20, 700 $172,500 3% 25% 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 $9.200. Marketing studies indicate that such a campaign would increase sales in the Medical market by $80,500 or increase sales in the Dental market by $69,000 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? 6 www Connon fixed expenses not traceable to markets office segment margin 20,700 $172,500 3% 25% nts eBook 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 $9.200. Marketing studies indicate that such a campaign would increase sales in the Medical market by $80,500 or increase sales in the Dental market by $69.000 Required: 1. How much would the company's profits Increase (decrease) if it implemented the advertising campaign in the Medical Market? 3. 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? Print 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) ir tt implemented the advertising campaign in the Medical Market? Company's pros ty Real: Required 2 > Required: 1. How much would the company's profits increase (decrease) if it implemented the advertising campaign in the Medical Mar 2. How much would the company's profits increase (decrease) if it implemented the advertising campaign in the Dental Mark 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 OTTice ment gun The company would like to initiate an intensive a campaign would cost $9,200. Marketing studies i or increase sales in the Dental market by $69,000 Book Print Required: 1. How much would the company's profits increase 2. How much would the company's profits increase 3. In which of the markets would you recommend t Complete this question by entering your answ Required 1 Required 2 Required 3 In which of the markets would you recommend that th Medical Dental