80.2K

Verified Solution

Link Copied!

Required information [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 $ 450,000 1000 225,000 508 225,000 505 126,000 288 99,000 228 63,000 140 office Chicago Minneapolis $ 150,000 1000 $ 300,000 1005 45,000 304 180,000 600 105,000 708 120,000 400 78.000 524 48,000 16 $ 27,000 188 $ 72,000 240 $ 36,000 88 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 $ 300.000 100 180,000 601 120,000 401 33,000 118 87,000 298 15,000 56 $ 72,000 241 Market Medical Dental 5 200,000 1008 $ 100,000 1005 128,000 648 52,000 520 72,000 368 48,000 488 12,000 60 21,000 211 $ 60,000 308 $ 27,000 278 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 $5,000. Marketing studies indicate that such a campaign would increase sales in the Medical market by $40,000 or increase sales in the Dental market by $35,000 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? 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 Medical Market? Company's profits by Required Required 2 > 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 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

Answer & Explanation Solved by verified expert

See Answer