Allison Guthrie has recently acquired a franchise of a wellknown fastfood restaurant chain. She is considering a special promotion for a week during which hamburger prices would be reduced $0.50 from the regular price of $1 .10 to $0.60. Local advertising expenses for this special promotion will amount to $400. Allison expects the promotion to increase sales of hamburgers b} 10% and French fries by 8%, but she expects the sales of chicken sandwiches to decline by 10'} n sandwich, will order a 1 Change in contribution margin with promotion l 'ofits. Should Allison go : Incremental COStS vant in this decision? Net effect Total sales with promotion 3n sales and profits. Shoul Total sales without promotion '5 are re'eVant \"f this . a net decrease In prot WI __n.._ Variable costs with promotion licken French Variable costs without promotion lwiches Fries Total ;;;: Allison Guthrie has recently acquired a franchise of a well-known fast-food restaurant chain. She I6 is considering a special promotion for a week during which hamburger prices would be reduced $0.50 from the regular price of $1 .10 to $0.60. Local advertising expenses for this special promotion will amount to $400. Allison expects the promotion to increase sales of hamburgers by 10% and French fries by 8%, but she expects the sales of chicken sandwiches to decline by 10% (because some customers, who othenavise may have ordered a chicken sandwich, will order a hamburger instead because of its attractive low price). The following data have been compiled for l I Change in contribution margin with promotion and prots_ Should Allison 90 a a relevant in this decision? Incremental costs Net effect )tion on sales and profits. Should arations are relevant in this 3 and a net decrease in prot with Total sales with promotion __n_ _ Total sales without promotion Variable costs with promotion Chicken French sandwiches Fries Total Variable costs without promotion E: lvllgg :l in revenues EMU Allison Guthrie has recently acquired a franchise of a well-known fast-food restaurant chain. She is considering a special promotion for a week during which hamburger prices would be reduced $0.50 from the regular price of $1 .10 to $0.60. Local advertising expenses for this special promotion will amount to $400. Allison expects the promotion to increase sales of hamburgers by 10% and French fries by 8%, but she expects the sales of chicken sandwiches to decline by 10% (because some customers, who othenlvise may have ordered a chicken sandwich, will order a hamburger instead because of its attractive low price). The following data have been compiled for sales prices, variable costs, and weekly sales volumes: g (Click the icon to view the data.) Requirement Evaluate the expected impact of the special promotion on sales and profits. Should Allison go ahead with this special promotion? What other considerations are relevant in this decision? @ Requirement Evaluate the expected impact of the special promotion on sales and profits. Should Allison go ahead with this special promotion? What other considerations are relevant in this decision? (Use a parentheses or a minus sign to show decreases and a net decrease in prot with promotion.) Chicken French Hamburgers sandwiches Fries Total Change in contribution margin with I Y Iin revenues Net decrease Net increase Allison Guthrie has recently acquired a franchise of a well-known fast-food restaurant chain. She is considering a special promotion for a week during which hamburger prices would be reduced $0.50 from the regular price of $1 .10 to $0.60. Local advertising expenses for this special promotion will amount to $400. Allison expects the promotion to increase sales of hamburgers by 10% and French fries by 8%, but she expects the sales of chicken sandwiches to decline by 10% (because some customers, who otherwise may have ordered a chicken sandwich, will order a hamburger instead because of its attractive low price). The following data have been compiled for sales prices, variable costs, and weekly sales volumes: g (Click the icon to View the data.) Requirement Evaluate the expected impact of the special promotion on sales and profits. Should Allison go ahead with this special promotion? What other considerations are relevant in this decision? Requirement Evaluate the expected impact of the special promotion on sales and profits. Should Allison go ahead with this special promotion? What other considerations are relevant in this decision? (Use a parentheses or a minus sign to show decreases and a net decrease in profit with promotion.) Chicken French Hamburgers sandwiches Fries Total Change in contribution margin with Data table PRODUCT SALES PRICE VARIABLE COSTS SALES VOLUME Hamburgers $ 1.10 $ 0.60 20,000 Chicken sandwiches 1.30 0.70 22.000 French fries 0.70 0.30 20,000