Assume that Minneapolis' sales by major market are: Sales Variable expenses Contribution margin Traceable fixed expenses Market segment margin Common fixed expensen hot traceable to markets office segment margin Required 1 Minneapolis Required 2 $ 315,000 189,000 126,000 34,650 91,350 Required 3 15,750 $ 75,600 100.00% 60.00% 40.00% 11.00% 29.00% 5.001 24.00% Medical $ 210,000 134,400. 75,600 12,600 $ 63,000 Market Dental 100.00% $ 105,000 54,600 50,400 22,050 $ 28,350 64.00% 36.000 6.00% 30.00% 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 $5,250, Marketing studies indicate that such a campaign would increase sales in the Medical market by $42,000 or increase sales in the Dental market by $36,750. 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. 100.00% 52.00% 48.00% 21.00 27.00%
Assume that Minneapolis' sales by major market are: Sales Variable expenses Contribution margin Traceable fixed expenses Market segment margin Common fixed expensen hot traceable to markets office segment margin Required 1 Minneapolis Required 2 $ 315,000 189,000 126,000 34,650 91,350 Required 3 15,750 $ 75,600 100.00% 60.00% 40.00% 11.00% 29.00% 5.001 24.00% Medical $ 210,000 134,400. 75,600 12,600 $ 63,000 Market Dental 100.00% $ 105,000 54,600 50,400 22,050 $ 28,350 64.00% 36.000 6.00% 30.00% 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 $5,250, Marketing studies indicate that such a campaign would increase sales in the Medical market by $42,000 or increase sales in the Dental market by $36,750. 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. 100.00% 52.00% 48.00% 21.00 27.00%
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter2: Basic Cost Management Concepts
Section: Chapter Questions
Problem 34P: Mason, Durant, and Westbrook (MDW) is a tax services firm. The firm is located in Oklahoma City and...
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![Required information
[The following information applies to the questions displayed below]
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
Total Company
$472,500
236,250
236,250
132,300
103,950
46,150
$ 37,000
Assume that Minneapolis' sales by major market are:
100.00%
50.00%
50.00%
28.00
22.001
14.00%
8.00%
Chicago.
$ 157,500
47,250
110,250
$1,900
$ 28,350
office
100.00%
30.00%
70.00%
52.00
18.00%
Minneapolis
$315,000
199,000
126,000
50,400
$75,600
100.00%
60.00%
40.00%
16.00%
24.00%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fef15f7a6-25d7-40a2-9077-df75f7df378b%2F314c2e59-c4bd-467f-a5a8-040003c52c66%2F6rhz22l_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 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
Total Company
$472,500
236,250
236,250
132,300
103,950
46,150
$ 37,000
Assume that Minneapolis' sales by major market are:
100.00%
50.00%
50.00%
28.00
22.001
14.00%
8.00%
Chicago.
$ 157,500
47,250
110,250
$1,900
$ 28,350
office
100.00%
30.00%
70.00%
52.00
18.00%
Minneapolis
$315,000
199,000
126,000
50,400
$75,600
100.00%
60.00%
40.00%
16.00%
24.00%
Transcribed Image Text:Assume that Minneapolis' sales by major market are:
Sales
Variable expenses
Contribution margin
Traceable fixed expenses
Market segment margin
Common fixed expenses hot traceable to
markets
office segnent margin
Required 1
Minneapolis
Required 2
$ 315,000
189,000
126,000
34,650
91,350
Required 3
15,750
$ 75,600
100.00%
60.00%
40.00%
11.00%
29.00%
5.00%
24.00%
Medical
$ 210,000
134,400.
75,600
12,600
$ 63,000
Market
Dental
100.00% $ 105,000
54,600
50,400
22,050
30.00% $ 28,350
64.00%
36.000
6.00
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 $5,250, Marketing studies indicate that such a campaign would increase sales in the Medical market by $42,000
or increase sales in the Dental market by $36,750.
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.
100.00%
52.00%
48.00%
21.00
27.00%
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