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 60% 120,000 40% 33,000 11% 87,000 29% 15,000 5% $ 72,000 24% Market Medical $ 200,000 100% 128,000 64% 72,000 36% 12,000 6% $ 60,000 30% Required: 1. How much would the company's profits increase (decrease) if it advertised in the Medical market? 2. How much would the company's profits increase (decrease) if it advertised in the Dental market? 3. Should the company advertise in the Medical or Dental market? Dental $ 100,000 100% 52,000 52% 48,000 48% 21,000 21% $ 27,000 27% The company is planning a $5,000 advertising campaign next month in either the Medical or Dental market. Marketing studies indicat this campaign would increase Medical market sales by $40,000 or Dental market sales by $35,000.
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 60% 120,000 40% 33,000 11% 87,000 29% 15,000 5% $ 72,000 24% Market Medical $ 200,000 100% 128,000 64% 72,000 36% 12,000 6% $ 60,000 30% Required: 1. How much would the company's profits increase (decrease) if it advertised in the Medical market? 2. How much would the company's profits increase (decrease) if it advertised in the Dental market? 3. Should the company advertise in the Medical or Dental market? Dental $ 100,000 100% 52,000 52% 48,000 48% 21,000 21% $ 27,000 27% The company is planning a $5,000 advertising campaign next month in either the Medical or Dental market. Marketing studies indicat this campaign would increase Medical market sales by $40,000 or Dental market sales by $35,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
please answer within the format by providing formula the detailed working
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Transcribed Image Text:Required information
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 60%
120,000 40%
33,000
11%
87,000 29%
15,000 5%
$ 72,000 24%
Medical
Complete this question by entering your answers in the tabs below..
Market
200,000
128,000
72,000
12,000
100%
64%
36%
6%
$ 60,000 30%
Required:
1. How much would the company's profits increase (decrease) if it advertised in the Medical market?
2. How much would the company's profits increase (decrease) if it advertised in the Dental market?
3. Should the company advertise in the Medical or Dental market?
The company is planning a $5,000 advertising campaign next month in either the Medical or Dental market. Marketing studies indicate
this campaign would increase Medical market sales by $40,000 or Dental market sales by $35,000.
Dental
$ 100,000 100%
52,000 52%
48,000 48%
21,000 21%
$ 27,000 27%
![Required information
[The following information applies to the questions displayed below.]
Raner, Harris and Chan is a consulting firm specializing in information systems for medical and dental clinics. The firm has
two offices-one in Chicago and one in Minneapolis. It 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 below:
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
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
Office
100%
30%
70%
52%
18%
Minneapolis
$ 300,000
180,000
120,000
48,000
$ 72,000
100%
60%
40%
16%
24%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F492121c0-3843-4585-9c4f-58f7a1b7b43d%2F70e11cae-d838-4cea-a9c8-d75481161f0c%2Fm8pz6s_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
Raner, Harris and Chan is a consulting firm specializing in information systems for medical and dental clinics. The firm has
two offices-one in Chicago and one in Minneapolis. It 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 below:
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
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
Office
100%
30%
70%
52%
18%
Minneapolis
$ 300,000
180,000
120,000
48,000
$ 72,000
100%
60%
40%
16%
24%
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