The company's sales manager proposes the following: a. Change the advertising approach from network television to an
Question:
The company's sales manager proposes the following:
a. Change the advertising approach from network television to an on-line model which will reduce advertising expenses by $15,000 but target the company's promotional activities to the right customer.
b. Deliver the product in a more exciting and attractive package, which would cost an additional $3 for every unit of sales.
c. Move to 1-day delivery for all on-line sales. One-day delivery would increase delivery charges by $3.50 per unit sold.
d. The sales manager believes that with these changes "unit sales will double, for sure".
Prepare an analysis of the implications for operating income of adopting the sales manager's recommendation.
Auditing An International Approach
ISBN: 978-0071051415
6th edition
Authors: Wally J. Smieliauskas, Kathryn Bewley