Uncommon Scents, which makes and sells perfume and body lotion, has $10,000 to spend on advertising. The company has estimated that using the $10,000 to advertise perfume would increase sales of perfume by 5,000 bottles. Uncommon Scents is uncer- tain how many additional tubes of body lotion it could sell by spending the $10,000, however. The perfume has a contribution margin of $8.50 per bottle, and the body lotion has a contribution margin of $2.50 per tube.

Required: Given this information, prepare an analysis to answer each of the following in- dependent questions.

(1) If spending the $10,000 on body lotion would increase its sales by 15,000 tubes, which product should Uncommon Scents advertise? (2) If spending the $10,000 on body lotion would increase its sales by 20,000 tubes, which product should Uncommon Scents advertise?

(3) By how many tubes would sales of body lotion have to increase to justify spending the $10,000 on body lotion instead of perfume? TYK-1