Differential Analysis for Sales Promotion Proposal Sole Mates Inc. is planning a one-month campaign for May to promote sales of one of its two shoe products. A total of $130,000 has been budgeted for advertising, contests, redeemable coupons, and other promotional activities. The following data have been assembled for their possible usefulness in deciding which of the products to select for the campaign.

No increase in facilities would be necessary to produce and sell the increased output. It is anticipated that 5,000 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.

Prepare a differential analysis as of May 13, 2012, to determine whether to promote tennis shoes (Alternative 1) or walking shoes (Alternative 2). If an amount is zero, enter zero"0".

Transcribed Image Text:

Differential Analysis Promote Tennis Shoe (AIt 1) or Promote Walking Shoe (AIt 2) May 13, 2012 Promote Tennis Shoe (Altemative 1) Promote Walking Shoe Atemative 2) Dtferential Effect on Income (Atermative 2) Revenuers Costs: Direct materias Drect labor Varable factory overhoad Variable seling expenses Sales promotion Income (Loss)