- Raner Harris And Chan Is A Consulting Firm That Specializes In Information Systems For Medical And Dental Clinics The 1 (61.73 KiB) Viewed 12 times
- Raner Harris And Chan Is A Consulting Firm That Specializes In Information Systems For Medical And Dental Clinics The 2 (10.31 KiB) Viewed 12 times
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: Office Total
Company Sales Chicago $ 160,500 48,150 30% 100% $ 100% 481,500 240,750 50% 240,750 50% Minneapolis $ 100% 321,000 192,600 60% Variable expenses Contribution margin 112,350 70 % Traceable fixed expenses 128,400 40% 51,360 16% 134,820 28% 83,460 52% Office segment margin 105,930 22% $ 28,890 18% $ 77,040 24% Common fixed expenses not traceable to offices 67,410 14% $ Net operating income 8% 38,520 Exercise 7-17 (Algo) Working with a Segmented Income
Statement [LO7-4] Assume that Minneapolis" sales by major market are: Dental Medical $ 214,000 100% Sales Variable expenses Minneapolis $ 321,000 100% 192,600 60% 128,400 40% $ 187,000 100% 55,640 52% 136,960 64% 77,040 36% Contribution margin 51,360 48% Traceable fixed expenses 35,310 11% 12,840 6% 22,470 21% S Office segment margin 93,090 29% $ 64,200 30% 27% 28,890 Common fixed expenses not traceable to offices 16,050 5 24 Net operating income $ 77,040 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 $5,350. Marketing studies indicate that such a campaign would increase sales in the Medical market by $42,800 or increase sales in the Dental market by $37,450. 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 profes Market
Required 1 Required 2 Required 3 How much would the
company's profits increase (decrease) if it implemented the advertising campaign in the Dental Market?
Company's profits < Required 1 Required 3