Required information SB Exercise 6-16 through Exercise 6-17 (Algo) [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 $ 454.000 1000 226.800 500 227,200 500 127.360 280 99,840 226 63,560 140 $36,280 Office Chicago Minneapolis $ 152.000 100N $ 302,000 1000 45.600 300 181 200 600 106,400 700 120, 800 400 79,040 529 48.320 168 $ 27, 360 188 $ 72,480 248 Exercise 6-17 (Algo) Working with a Segmented Income Statement (LO6-4) 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 $ 302,000 1000 181,200 600 120,800 400 33,220 110 87.580 293 15, 100 58 $ 72,480 240 Market Medical Dental $ 204.000 1000 $ 104,000 1000 130.560 642 54.000 522 75,000 361 49,920 488 12-240 65 21.840 214 $ 61,200 308 28,080 274 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 $6,000. 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 $38,000. 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? LL De 1 2 Navt 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 2 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