Question

Please answer all parts of question correctly

Chapter 60 6 Help Save & Exk Che Exercise 6-17 Working with a Segmented Income Statement(L064) 10 points Raner. Harris & Chan is a consulting firm that specializes in information systems for medical and dental cinics. 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 Assume that Minneapolis' sales by major market are: Skipped Dental $840,000 100% $560,000 1001 $280,000 1004 504,000 60364,00065 140,000 501 Variable expenses Contribution margin Traceable fixed expenses Karket segnent nargin Conmon fixed expenses 336,000 40% 196,000 35% 140,000 50 100,800228,0005 72,800 26 Print 235,200 2ON $168,000 30% 67,200 24% not traceable to markets References office segnent margin $210,000 25% The company would like to initiate an intensive advertising campaign would cost $11200. Marketing studies indicate that such a campaign would increase sales in the Medical market by $98,000 or increase sales in the Dental market by $84,000 campaign in one of the two market segments during the next month. The 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 Prev 1 of 2 Next

Answer 1

A. Ans Total Medical Dental Sales Variable Expenses Contribution Margin Traceable Fixed Expenses Market Segment Margin Common Fixed Expenses Office Segment Margin 100% 61% 39% 11% 29% 100% 65% 35% 4% 31% 100% 938000 567700 370300 100800 658000 427700 230300 28000 202300 140000 140000 72800 67200 50% 26% 24% 3% 26% 25200 244300 Ans 2 Total Medical Dental Sales Variable Expenses Contribution Margin Traceable Fixed Expenses Market Segment Margin Common Fixed Expenses Office Segment Margin 924000 502320 421680 100800 320880 100% 65% 35% 5% 100% 38% 62% 20% 42% 364000 138320 54% 46% 11% 35% 364000 28000 72800 152880 168000 25200 295680 Ans 3 As total profit increases by implementing plan in dental sector, it should be implemented there