Marple Associates is a consulting firm that specializes in information systems for construction and

Marple Associates is a consulting firm that specializes in information systems for construction and landscaping companies. The firm has two offices—one in Houston and one in Dallas. The firm classifies the direct costs of consulting jobs as variable costs.

Assume that Dallas’ sales by major market are as follows:

					Market
	Dallas				Construction Clients				Landscaping Clients
Sales	$	600,000	100	%	$	400,000	100	%	$	200,000	100	%
Variable expenses		360,000	60			260,000	65			100,000	50
Contribution margin		240,000	40			140,000	35			100,000	50
Traceable fixed expenses		72,000	12			20,000	5			52,000	26
Market segment margin		168,000	28		$	120,000	30	%	$	48,000	24	%
Common fixed expenses not      traceable to markets		18,000	3
Office segment margin	$	150,000	25	%

The company would like to initiate an intensive advertising campaign in one of the two markets during the next month. The campaign would cost $8,000. Marketing studies indicate that such a campaign would increase sales in the construction market by $70,000 or increase sales in the landscaping market by $60,000.

Required:

1a.	Calculate the increased segment margin. (Omit the "$" sign in your response.)

	Construction         Clients	Landscaping       Clients
Increased segment margin	$ 16,500	$ 22,000

1b.	In which of the markets would you recommend that the company focus its advertising campaign?
	Landscaping Clients