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Assume that Minneapolis' sales by major market are: Sales Variable expenses Contribution margin Traceable fixed expenses Market segment margin Common fixed expensen hot traceable to markets office segment margin Required 1 Minneapolis Required 2 $ 315,000 189,000 126,000 34,650 91,350 Required 3 15,750 $ 75,600 100.00% 60.00% 40.00% 11.00% 29.00% 5.001 24.00% Medical $ 210,000 134,400. 75,600 12,600 $ 63,000 Market Dental 100.00% $ 105,000 54,600 50,400 22,050 $ 28,350 64.00% 36.000 6.00% 30.00% 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 $5,250, Marketing studies indicate that such a campaign would increase sales in the Medical market by $42,000 or increase sales in the Dental market by $36,750. 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. 100.00% 52.00% 48.00% 21.00 27.00%

Assume that Minneapolis' sales by major market are: Sales Variable expenses Contribution margin Traceable fixed expenses Market segment margin Common fixed expensen hot traceable to markets office segment margin Required 1 Minneapolis Required 2 $ 315,000 189,000 126,000 34,650 91,350 Required 3 15,750 $ 75,600 100.00% 60.00% 40.00% 11.00% 29.00% 5.001 24.00% Medical $ 210,000 134,400. 75,600 12,600 $ 63,000 Market Dental 100.00% $ 105,000 54,600 50,400 22,050 $ 28,350 64.00% 36.000 6.00% 30.00% 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 $5,250, Marketing studies indicate that such a campaign would increase sales in the Medical market by $42,000 or increase sales in the Dental market by $36,750. 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. 100.00% 52.00% 48.00% 21.00 27.00%

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Required information [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 $472,500 236,250 236,250 132,300 103,950 46,150 $ 37,000 Assume that Minneapolis' sales by major market are: 100.00% 50.00% 50.00% 28.00 22.001 14.00% 8.00% Chicago. $ 157,500 47,250 110,250 $1,900 $ 28,350 office 100.00% 30.00% 70.00% 52.00 18.00% Minneapolis $315,000 199,000 126,000 50,400 $75,600 100.00% 60.00% 40.00% 16.00% 24.00%
Transcribed Image Text:Required information [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 $472,500 236,250 236,250 132,300 103,950 46,150 $ 37,000 Assume that Minneapolis' sales by major market are: 100.00% 50.00% 50.00% 28.00 22.001 14.00% 8.00% Chicago. $ 157,500 47,250 110,250 $1,900 $ 28,350 office 100.00% 30.00% 70.00% 52.00 18.00% Minneapolis $315,000 199,000 126,000 50,400 $75,600 100.00% 60.00% 40.00% 16.00% 24.00%
Assume that Minneapolis' sales by major market are: Sales Variable expenses Contribution margin Traceable fixed expenses Market segment margin Common fixed expenses hot traceable to markets office segnent margin Required 1 Minneapolis Required 2 $ 315,000 189,000 126,000 34,650 91,350 Required 3 15,750 $ 75,600 100.00% 60.00% 40.00% 11.00% 29.00% 5.00% 24.00% Medical $ 210,000 134,400. 75,600 12,600 $ 63,000 Market Dental 100.00% $ 105,000 54,600 50,400 22,050 30.00% $ 28,350 64.00% 36.000 6.00 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 $5,250, Marketing studies indicate that such a campaign would increase sales in the Medical market by $42,000 or increase sales in the Dental market by $36,750. 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. 100.00% 52.00% 48.00% 21.00 27.00%
Transcribed Image Text:Assume that Minneapolis' sales by major market are: Sales Variable expenses Contribution margin Traceable fixed expenses Market segment margin Common fixed expenses hot traceable to markets office segnent margin Required 1 Minneapolis Required 2 $ 315,000 189,000 126,000 34,650 91,350 Required 3 15,750 $ 75,600 100.00% 60.00% 40.00% 11.00% 29.00% 5.00% 24.00% Medical $ 210,000 134,400. 75,600 12,600 $ 63,000 Market Dental 100.00% $ 105,000 54,600 50,400 22,050 30.00% $ 28,350 64.00% 36.000 6.00 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 $5,250, Marketing studies indicate that such a campaign would increase sales in the Medical market by $42,000 or increase sales in the Dental market by $36,750. 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. 100.00% 52.00% 48.00% 21.00 27.00%
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