Question

Paradise Burger Company makes two burgers, each in a separate division: cheeseburgers and chiliburgers. Segmented income statements for the most recent year are as follows:


Paradise Burger’s management is considering a special advertising campaign during broadcast coverage of a major sporting event. Management has determined that based on the expense of the advertising campaign, $28,000, only one division can be featured. In-house marketing studies suggest that the campaign could increase sales of the cheeseburgers division by $100,000 or increase sales of the chiliburgers division by $75,000.

Required
Which product should be featured in the campaign? Why? Show computations to support yourrecommendation.


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  • CreatedMarch 11, 2015
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