Raner, Harris and Chan is a consulting firm that specializes in information systems for medical and...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
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: Office Sales Variable expenses Contribution margin. Traceable fixed expenses office segment margin Common fixed expenses not traceable to offices Net operating income Sales Variable expenses Assume that Minneapolis' sales by major market are: Contribution margin Traceable fixed expenses Market segment margin Common fixed expenses not traceable to markets Office segment margin Total Company $ 472,500 236,250 236,250 132,300 103,950 66,150 $ 37,800 100.00% 50.00% 50.00% 28.00% 22.00% $ 315,000 189,000 126,000 34,650 91,350 15,750 $ 75,600 14.00% 8.00% Minneapolis 100.00% 60.00% 40.00% 11.00% 5.00% 24.00% $ 157,500 47,250 110,250 81,900 $ 28,350 Chicago Medical $ 210,000 134,400 75,600 12,600 29.00% $ 63,000 100.00% 30.00% 70.00% 52.00% 18.00% Market 100.00% 64.00% 36.00% 6.00% 30.00% Minneapolis $ 315,000 189,000 126,000 50,400 $ 75,600 Dental $ 105,000 54,600 50,400 22,050 $ 28,350 100.00% 60.00% 40.00% 16.00% 24.00% 100.00% 52.00% 48.00% 21.00% 27.00% 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 $5,250. Marketing studies indicate that such a campaign would increase sales in the Medical market by $42,000 or increase sales in the Dental market by $36,750. 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? 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: Office Sales Variable expenses Contribution margin. Traceable fixed expenses office segment margin Common fixed expenses not traceable to offices Net operating income Sales Variable expenses Assume that Minneapolis' sales by major market are: Contribution margin Traceable fixed expenses Market segment margin Common fixed expenses not traceable to markets Office segment margin Total Company $ 472,500 236,250 236,250 132,300 103,950 66,150 $ 37,800 100.00% 50.00% 50.00% 28.00% 22.00% $ 315,000 189,000 126,000 34,650 91,350 15,750 $ 75,600 14.00% 8.00% Minneapolis 100.00% 60.00% 40.00% 11.00% 5.00% 24.00% $ 157,500 47,250 110,250 81,900 $ 28,350 Chicago Medical $ 210,000 134,400 75,600 12,600 29.00% $ 63,000 100.00% 30.00% 70.00% 52.00% 18.00% Market 100.00% 64.00% 36.00% 6.00% 30.00% Minneapolis $ 315,000 189,000 126,000 50,400 $ 75,600 Dental $ 105,000 54,600 50,400 22,050 $ 28,350 100.00% 60.00% 40.00% 16.00% 24.00% 100.00% 52.00% 48.00% 21.00% 27.00% 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 $5,250. Marketing studies indicate that such a campaign would increase sales in the Medical market by $42,000 or increase sales in the Dental market by $36,750. 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?
Expert Answer:
Answer rating: 100% (QA)
The companys profits would increase by 12250 if it implemented the advertising campaign in the Medic... View the full answer
Related Book For
Managerial Accounting
ISBN: 9781260247787
17th Edition
Authors: Ray Garrison, Eric Noreen, Peter Brewer
Posted Date:
Students also viewed these accounting questions
-
Find the equation of the tangent plane at point P = (1, 0, ).
-
Raner, Harris & Chan is a consulting firm that specializes in information systems for medical and dental clinics. The firm has two officesone in Chicago and one in Minneapolis. The firm classifies...
-
Raner, Harris & Chan is a consulting firm that specializes in information systems for medical and dental clinics. The firm has two officesone in Chicago and one in Minneapolis. The firm...
-
Evaluate the expression for the given value(s) of the variable(s). 4x - 7, x = 5/2
-
Upton Computers makes bulk purchases of small computers, stocks them in conveniently located warehouses, ships them to its chain of retail stores, and has a staff to advise customers and help them...
-
a. Karen has been offered two similar positions at competing financial firms. One position pays an annual salary of $61 200. The other job guarantees a salary of $2000 per month plus a commission of...
-
You are midway up hill A in Figure P9.75. Across the valley is the shorter hill \(B\), the summit of which is slightly higher than your present spot. You want to roll a ball so that it crests hill B....
-
Summarize the endosymbiotic theory and explain how it accounts for major structural similarities and differences between bacterial and eukaryotic cells.
-
What are the overall skills required to manage resources in order to deliver a task, product or service known as?
-
Exercise 6.1 Configuring Memory on Paper Objective: a computer is not performing as well as it used to. Windows 10 tool would the technician get the user to open to quickly tell how much RAM is...
-
Its critical that you understand all the factors that make a customer a good candidate to buy your product. Pick one of the following products to conduct your own analysis. Louis Vuitton Bag Planet...
-
What advice (biblical and financial) might you offer someone who is seeking to balance paying off debt, tithing and giving, saving for short-term goals, and saving for long-term goals? Would you...
-
Xilinx Inc has a beta of 1.33 and the average market return is 0.18. If the risk free rate is 4 percent, find the expected return for Xilinx Inc (round your answers). a) 22.6% b) 13.1% c) none of...
-
What is the primary advantage of an Investment Policy Statement? Question 31Answer a. Guarantees high investment returns. b. Provides a clear and disciplined investment strategy. c. Ensures...
-
Central banks' policies during the global financial crisis in 2008 were designed to: Question 4Answer a. Increase liquidity in the market b. Start purchasing bonds from the private sector c. Act as...
-
The following figure shows a plot of drug X and drug Y concentration against time after oral administration. Drug plasma concentration (g/ml) 80- 60- Drug X 40- 40 20- Drug Y 0+ 0 2 4 6 8 10 12 14...
-
1. Select a domestic or international company of your choice and describe their functional and philosophical marketing approach. Based on your choice of company, you may choose to research, analyze,...
-
Smiths Family Fashions implemented a balanced scorecard performance measurement system several years ago. Smiths is a locally owned clothing retailer with fashions for men, women, teens, and...
-
What are the four categories of measures in a balanced scorecard?
-
Assume that a company repays a $300,000 loan from its bank and then later in the same year borrows $500,000. What amount(s) would appear on the statement of cash flows?
-
Matheson Electronics has just developed a new electronic device it believes will have broad market appeal. The company has performed marketing and cost studies that revealed the following...
-
What is the difference between internal and external audiences?
-
Like most major corporations, the U.S. Census Bureau has multiple, conflicting audiences, among them the president, Congress, press, state governments, citizens (both as providers and users of data),...
-
Listed here are several things an organization might like its employees to do: 1. Write fewer emails. 2. Volunteer at a local food pantry. 3. Volunteer to recruit interns at a job fair. 4. Attend...
Study smarter with the SolutionInn App