The company controller has set the revenue target for 2023 at $10,193,100 (or 55,700 pairs). He believes an additional marketin cost of $449,000 for
The company controller has set the revenue target for 2023 at $10,193,100 (or 55,700 pairs). He believes an additional marketin cost of $449,000 for advertising in 2023, with all other costs remaining constant, will be necessary to attain the revenue target. Calculate the operating income for 2023 if the additional $449,000 is spent and the revenue target is met. Operating income $ Crane Footwear Co. produces high-quality shoes. To prepare for next year's marketing campaign, the company's controller has prepared the following information for the current year, 2022: Variable costs (per pair of shoes) Direct materials $41 Direct manufacturing labour 22 Variable overhead (manufacturing, marketing, distribution, customer service, and administration) 20 $83 Total variable costs Fixed costs Manufacturing Marketing, distribution, and customer service Administrative Total fixed costs $2,785,000 545,000 725,000 $4,055,000 Fixed costs Manufacturing Marketing, distribution, and customer service Administrative Total fixed costs $2,785,000 545,000 725,000 $4,055,000 Selling price per pair of shoes $183 Expected revenues, 2022 (50,700 units) $9,278,100 Income tax rate 40%
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