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:     Total Company Office Chicago Minneapolis Sales $ 508,500 100.00% $ 169,500 100.00% $ 339,000 100.00% Variable expenses 254,250 50.00% 50,850 30.00% 203,400 60.00% Contribution margin 254,250 50.00% 118,650 70.00% 135,600 40.00% Traceable fixed expenses 142,380 28.00% 88,140 52.00% 54,240 16.00% Office segment margin 111,870 22.00% $ 30,510 18.00% $ 81,360 24.00% Common fixed expenses not traceable to offices 71,190 14.00%         Net operating income $ 40,680 8.00%           rev: 06_09_2020_QC_CS-215744, 09_15_2020_QC_CS-220558, 11_04_2020_QC_CS-238526, 03_30_2021_QC_CS-258090   Exercise 6-17 (Algo) Working with a Segmented Income Statement [LO6-4] Assume that Minneapolis’ sales by major market are:     Minneapolis Market Medical Dental Sales $ 339,000 100.00% $ 226,000 100.00% $ 113,000 100.00% Variable expenses 203,400 60.00% 144,640 64.00% 58,760 52.00% Contribution margin 135,600 40.00% 81,360 36.00% 54,240 48.00% Traceable fixed expenses 37,290 11.00% 13,560 6.00% 23,730 21.00% Market segment margin 98,310 29.00% $ 67,800 30.00% $ 30,510 27.00% Common fixed expenses not traceable to markets 16,950 5.00%         Office segment margin $ 81,360 24.00%           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 $5,650. Marketing studies indicate that such a campaign would increase sales in the Medical market by $45,200 or increase sales in the Dental market by $39,550.   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?

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