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The company would like to initiate an intensive advertising campaign in on campaign would cost $6,000. Marketing studies indicate that such a campa or increase sales in the Dental market by $42,000. Required:

The company would like to initiate an intensive advertising campaign in on campaign would cost $6,000. Marketing studies indicate that such a campa or increase sales in the Dental market by $42,000. Required:

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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vaibhav

Subject:Accounting

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 $6,000. Marketing studies indicate that such a campaign would increase sales in the Medical market by $48,000 or increase sales in the Dental market by $42,000. 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 How much would the company's profits increase (decrease) if it implemented the advertising campaign in the Medical Market? Company's profits by < Required 1 Required 2 >
Transcribed Image Text: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 $6,000. Marketing studies indicate that such a campaign would increase sales in the Medical market by $48,000 or increase sales in the Dental market by $42,000. 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 How much would the company's profits increase (decrease) if it implemented the advertising campaign in the Medical Market? Company's profits by < Required 1 Required 2 >
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 Exercise 7-17 (Algo) Working with a Segmented Income Statement [LO7-4 Assume that Minneapolis' sales by major market are: Sales Variable expenses Contribution margin Traceable fixed expenses Total Company $ 540,000 100% 270,000 50% 270,000 50% 151, 200 28% 118,800 22% 75,600 14% $ 43,200 8% Office segment margin Common fixed expenses not traceable to offices Net operating income Minneapolis $360,000 100% 216,000 60% 144,000 40% 39,600 11% 104,400 29% 18,000 5 % $86,400 24 % Office Chicago $ 180,000 100% 54,000 30% 126,000 70% 93,600 52% $ 32,400 18% Market Medical $ 240,000 100% 153,600 64% 86,400 36% 14,400 6% $ 72,000 30% Minneapolis $360,000 100% 216,000 60% 144,000 40% 57,600 16% $ 86,400 24% Dental $ 120,000 62,400 57,600 25, 200 $ 32,400 100% 52% 48% 21% 27%
Transcribed Image Text: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 Exercise 7-17 (Algo) Working with a Segmented Income Statement [LO7-4 Assume that Minneapolis' sales by major market are: Sales Variable expenses Contribution margin Traceable fixed expenses Total Company $ 540,000 100% 270,000 50% 270,000 50% 151, 200 28% 118,800 22% 75,600 14% $ 43,200 8% Office segment margin Common fixed expenses not traceable to offices Net operating income Minneapolis $360,000 100% 216,000 60% 144,000 40% 39,600 11% 104,400 29% 18,000 5 % $86,400 24 % Office Chicago $ 180,000 100% 54,000 30% 126,000 70% 93,600 52% $ 32,400 18% Market Medical $ 240,000 100% 153,600 64% 86,400 36% 14,400 6% $ 72,000 30% Minneapolis $360,000 100% 216,000 60% 144,000 40% 57,600 16% $ 86,400 24% Dental $ 120,000 62,400 57,600 25, 200 $ 32,400 100% 52% 48% 21% 27%
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