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 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: @ (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? X 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 Print DoneRequirement 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 Total sales with promotion $ 13,200' $ 25,740' $ 15,120' 54,060' Total sales without promotion w w w w Net ' decrease in revenues (10.540) SEES: : E E E E I:I in variable costs |;| and profits. Should Allison are relevant in this Change in contribution margin with promotion Incremental costs tion on sales and profits. considerations are Net effect show decreases and a net Total sales with promotion French Total sales without promotion Fries Total $ 15,120 54,060 Variable costs with promotion 14,000 64,600 Variable costs without promotion (10,540) in variable costs