Required information SB Exercise 7-16 through Exercise 7-17 (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: Total Company $ 462,000 100% 231,000 50% 231,000 50% 129, 360 28% Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Net operating income Office Chicago Minneapolis $ 156,000 100% $ 306,000 100% 46,800 308 183,600 60% 109,200 70% 122,400 40% 81,120 528 48,960 16% $ 28,080 18% $ 73,440 24% 22% 101,640 64,680 $ 36,960 14% 8% Exercise 7-17 (Algo) Working with a Segmented Income Statement [LO7-4) Assume that Minneapolis' sales by major market are: Minneapolis $ 306,000 100% 183,600 60% 122,400 40% 48,960 16% 73,440 24% 15,000 5 % Sales Variable expenses Contribution margin Traceable fixed expenses Office segment margin Common fixed expenses not traceable to offices Net operating income Market Medical Dental $ 208,000 100% $ 108,000 133, 120 64% 56,160 74,880 36% 51,840 12,480 6% 22,680 $ 62,400 30% $ 29,160 100% 52% 48% 21% 27% $ 58,440 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 $7,000. Marketing studies indicate that such a campaign would increase sales in the Medical market by $44,000 or increase sales in the Dental market by $41,000. 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 In which of the markets would you recommend that the company focus its advertising campaign? Medical Dental 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