! Required information [The following information applies to the questions displayed below.] Raner, Harris and Chan...

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! Required information [The following information applies to the questions displayed below.] Raner, Harris and Chan is a consulting firm specializing in information systems for medical and dental clinics. The firm has two officesone in Chicago and one in Minneapolis. It 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 below: Office Total Company Chicago Minneapolis Sales $ 468,000 Variable expenses 234, 000 100.00% 50.00% $ 156,000 46, 800 100.00% 30.00% $ 312,000 100.00% 187, 200 60.00% Contribution margin 234,000 50.00% 109, 200 70.00% 124, 800 40.00% Traceable fixed expenses 131, 040 28.00% 81, 120 52.00% 49, 920 16.00% Office segment margin 102, 960 22.00% $ 28, 080 18.00% $ 74, 880 24.00% Common fixed expenses not traceable to offices 65, 520 14.00% Net operating income $ 37,440 8.00% Assume Minneapolis's sales by major market are: Market Minneapolis Medical Dental Sales Variable expenses $ 312,000 187, 200 100.00% 60.00% $ 208,000 133, 120 100.00% 64.00% $ 104,000 100.00% 54, 080 52.00% Contribution margin 124, 800 40.00% 74, 880 36.00% 49, 920 48.00% Traceable fixed expenses 34, 320 11.00% 12, 480 6.00% 21, 840 21.00% Market segment margin 90, 480 Common fixed expenses not traceable to markets 15, 600 Office segment margin $ 74, 880 29.00% 5.00% 24.00% $ 62, 400 30.00% $ 28, 080 27.00% The company is planning a $5,200 advertising campaign next month in either the Medical or Dental market. Marketing studies indicate this campaign would increase Medical market sales by $41,600 or Dental market sales by $36,400. Required: 1. How much would the company's profits increase (decrease) if it advertised in the Medical market? 2. How much would the company's profits increase (decrease) if it advertised in the Dental market? 3. Should the company advertise in the Medical or Dental market? ! Required information [The following information applies to the questions displayed below.] Raner, Harris and Chan is a consulting firm specializing in information systems for medical and dental clinics. The firm has two officesone in Chicago and one in Minneapolis. It 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 below: Office Total Company Chicago Minneapolis Sales $ 468,000 Variable expenses 234, 000 100.00% 50.00% $ 156,000 46, 800 100.00% 30.00% $ 312,000 100.00% 187, 200 60.00% Contribution margin 234,000 50.00% 109, 200 70.00% 124, 800 40.00% Traceable fixed expenses 131, 040 28.00% 81, 120 52.00% 49, 920 16.00% Office segment margin 102, 960 22.00% $ 28, 080 18.00% $ 74, 880 24.00% Common fixed expenses not traceable to offices 65, 520 14.00% Net operating income $ 37,440 8.00% Assume Minneapolis's sales by major market are: Market Minneapolis Medical Dental Sales Variable expenses $ 312,000 187, 200 100.00% 60.00% $ 208,000 133, 120 100.00% 64.00% $ 104,000 100.00% 54, 080 52.00% Contribution margin 124, 800 40.00% 74, 880 36.00% 49, 920 48.00% Traceable fixed expenses 34, 320 11.00% 12, 480 6.00% 21, 840 21.00% Market segment margin 90, 480 Common fixed expenses not traceable to markets 15, 600 Office segment margin $ 74, 880 29.00% 5.00% 24.00% $ 62, 400 30.00% $ 28, 080 27.00% The company is planning a $5,200 advertising campaign next month in either the Medical or Dental market. Marketing studies indicate this campaign would increase Medical market sales by $41,600 or Dental market sales by $36,400. Required: 1. How much would the company's profits increase (decrease) if it advertised in the Medical market? 2. How much would the company's profits increase (decrease) if it advertised in the Dental market? 3. Should the company advertise in the Medical or Dental market?

Answer rating: 100% (QA)

Answer To determine the impact of the advertising campaign on the companys profits in the Medical an... View the full answer