AI Required information 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 Required 1 $ 300,000 180,000 120,000 33,000 87,000 15,000 $ 72,000 Complete this question by entering your answers in the tabs below. Required 2 Required 3 100% 60% 40% 118 298 58 248 Medical $ 200,000 128,000 72,000 12,000 $ 60,000 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. Market 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? 100% 648 36% 68 30% Dental 100% $ 100,000 52,000 528 48% 48,000 218 21,000 $ 27,000 278

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Required information
SB Exercise 6-16 through Exercise 6-17 (Static)
[The following information applies to the questions displayed below.]
Raner, Harris and 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
Assume that Minneapolis' sales by major market are:
$ 450,000
225,000
225,000
126,000
99,000
63,000
$ 36,000
100%
50%
50%
28%
22%
14%
8%
Chicago
$ 150,000
45,000
105,000
78,000
$ 27,000
Exercise 6-17 (Static) Working with a Segmented Income Statement [LO6-4]
Office
100%
30 %
70%
52%
18%
Minneapolis
$ 300,000
180,000
120,000
48,000
$ 72,000
100%
60%
40%
16%
24%
Transcribed Image Text:Required information SB Exercise 6-16 through Exercise 6-17 (Static) [The following information applies to the questions displayed below.] Raner, Harris and 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 Assume that Minneapolis' sales by major market are: $ 450,000 225,000 225,000 126,000 99,000 63,000 $ 36,000 100% 50% 50% 28% 22% 14% 8% Chicago $ 150,000 45,000 105,000 78,000 $ 27,000 Exercise 6-17 (Static) Working with a Segmented Income Statement [LO6-4] Office 100% 30 % 70% 52% 18% Minneapolis $ 300,000 180,000 120,000 48,000 $ 72,000 100% 60% 40% 16% 24%
1
Required information
****
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
:
Required 1
Minneapolis
$ 300,000
180,000
120,000
33,000
87,000
15,000
$ 72,000
Complete this question by entering your answers in the tabs below.
Required 2 Required 3
100%
60%
40%
11%
298
5%
248
Medical
$ 200,000
128,000
72,000
12,000
$ 60,000
Market
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.
100%
64%
36%
6%
30%
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?
Dental
100%
$ 100,000
52,000 52%
48,000 48%
21%
21,000
$ 27,000
27%
Transcribed Image Text:1 Required information **** 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 : Required 1 Minneapolis $ 300,000 180,000 120,000 33,000 87,000 15,000 $ 72,000 Complete this question by entering your answers in the tabs below. Required 2 Required 3 100% 60% 40% 11% 298 5% 248 Medical $ 200,000 128,000 72,000 12,000 $ 60,000 Market 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. 100% 64% 36% 6% 30% 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? Dental 100% $ 100,000 52,000 52% 48,000 48% 21% 21,000 $ 27,000 27%
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