Answer:
1. Medical market $10,725
2. Dental market $14,300
3. Dental market
Explanation:
1. Calculation for How much would the company's profits increase (decrease) in the Medical Market
MEDICAL MARKET
Increase in sales $45,500
Contribution Magin ratio 35%
Increase in contribution margin $15,925
(Medical $45,500*35%=$15,925)
Less increase in Advertisement $5,200
Increase in company profit
$10,725
Based on the above calculation Medical Market profit will increase by $10,725
2. Calculation for How much would the company's profits increase (decrease) in the Dental Market
DENTAL MARKET
Increase in sales $39,000
Contribution Magin ratio 50%
Increase in contribution margin $19,500
(Dental $39,000*50%=$19,500)
Less increase in Advertisement $5,200
Increase in company profit
$14,300
Based on the above calculation Dental Market profit will increase by $14,300
3. Based on the above calculation I would recommend that the company should focus its advertising campaign on DENTAL MARKET because DENTAL MARKET has the highest profit of the amount of $14,300 than Medical market which has a profit of $10,725.
