Sole Mates Inc. is planning a one- month campaign for July to promote sales of one of
Question:
.:.
No increase in facilities would be necessary to produce and sell the increased output. It is anticipated that 7,000 additional units of tennis shoes or 7,000 additional units of walking shoes could be sold without changing the unit selling price of either product.
Instructions
1. Prepare a differential analysis as of June 19, 2014, to determine whether to promote tennis shoes (Alternative 1) or walking shoes (Alternative 2).
2. The sales manager had tentatively decided to promote walking shoes, estimating that operating income would be increased by $ 5,000 ($ 15 operating income per unit for 7,000 units, less promotion expenses of $ 100,000). The manager also believed that the selection of tennis shoes would reduce operating income by $ 37,000 ($ 9 operating income per unit for 7,000 units, less promotion expenses of $ 100,000). State briefly your reasons for supporting or opposing the tentative decision.
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Related Book For
Financial And Managerial Accounting
ISBN: 9781337119207
14th Edition
Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac
Question Posted: