- 1 Required Information The Following Information Applies To The Questions Displayed Below Raner Harris And Chan Is A 1 (39.17 KiB) Viewed 67 times
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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 Chicago; Sales $ 477,000 $ 159,000 100.00% Minneapolis $ 318,000 190,800 100.00% 100.00% 50.00% Variable expenses Contribution margin 47,700 30.00% 60.00% 238,500 238,500 50.00% 111,300 70.00% 127,200 40.00% Traceable fixed expenses 133,560 28.00% 82,680 50,880 16.00% 52.00% 18.00% Office segment margin 104,940 22.00% $ 28,620 $ 76,320 24.00% Common fixed expenses not traceable. to offices 66,780 14.00 8.00% Net operating income $ 38,160 By how much would the company's net operating income increase if Minneapolis increased its sales by $79,500 per year? Assume o change in cost behavior patterns. Net operating income increase
Assume that Minneapolis' sales by major market are: Market Medical Sales Minneapolis 100.00% 60.00% $212,000 100.00 $ 106,000 $ 318,000 190,800 100.00% Variable expenses Contribution margin 135,680 64.00% 55,120 52.00% 127,200 40.00% 76,320 36.00% 50,880 48.00% Traceable fixed expenses 34,980 11.00% 12,720 6.00% 22,260 21.00% Market segment margin 92,220 29.00% $ 63,600 30.004 $ 28,620 27.00% Common fixed expenses not traceable to markets 15,900 5.00% Office segment margin $ 76,320 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 $5,300. Marketing studies indicate that such a campaign would increase sales in the Medical market by $42,400 or increase sales in the Dental market by $37,100. 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 Required 2 > Dental
Office segment margin $ 76,320 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 $5,300. Marketing studies indicate that such a campaign would increase sales in the Medical market by $42,400 Or increase sales in the Dental market by $37,100. Required: 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 31 Required 2 How much would the company's profits increase (decrease) if it implemented the advertising campaign in the Medical Market? Company's profits by Regular 1 Required 2 >
Office segment margin $ 76,320 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 $5,300. Marketing studies indicate that such a campaign would increase sales in the Medical market by $42,400 or increase sales in the Dental market by $37.100. 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 Dental Market? Company's profits < Required 1 Required 3 >
Common Tixed expenses not traceable to markets. 15,900 5.00% office segment margin $ 76,320 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 $5,300. Marketing studies indicate that such a campaign would increase sales in the Medical market by $42,400 or increase sales in the Dental market by $37,100. 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 In which of the markets would you recommend that the company focus its advertising campaign? Medical Dental <Required 2