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Exercise 6-17 Working with a Segmented Income Statement [LO6-4) 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 10 points Assume that Minneapolis' sales by major market are: Market Sales Variable expenses Contribution nargin Traceable tixed expenses Market segment margin Common fixed expenses not traceable to markets Office segnent margin $840,000 1008 $560,000 100% $280,000 1001 504.000608 364.00065 140,00050 336,000 40% 196,000 35% 140,000 50% 100.800 12928,00072,80026 235,200 281 $168,000 301S 67,200 24% Print References 25.200 $210,000 25t 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 $11,200. Marketing studies indicate that such a campaign would increase sales in the Medical market by $98.000 or increase sales in the Dental market by $84,000. 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 Pre, 1 of 2 Next >