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Raner, Harris, & 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.
Assume that Minneapolis' sales by major market are as follows:
270,000
60%
195,000
65%
75,000
50%
54,000
12%
15,000
5%
39,000
26%
$90,000
30%
$36,000
24%
$112,500
25%
The company would like to initiate an intensive advertising campaign in one of the two market segmentsduring the next month. The campaign would cost $6,000. Marketing studies indicate that such a campaign would increase sales in the Medical market by $52,500 or increase sales in the Dental market by $45,000.
Required:Determine the increase in net operating income in each market if the advertising campaign were to be initiated in that market.(Omit the "tiny_mce_markerquot; sign in your response.)
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