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Company Ltd. has provided the following relating to the most recent month of operations, for their main product, cookies. The company sold 20,000 cookies. Sales
Company Ltd. has provided the following relating to the most recent month of operations, for their main product, cookies. The company sold 20,000 cookies. | |||
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Sales | 40,000 |
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COGS | 16,000 |
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Fixed Selling Costs | 2,000 |
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Fixed Administrative Costs | 5,000 |
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Variable Selling Costs | 10% of sales |
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Variable Administrative Costs | 2,000 |
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The owner thinks that 22,000 cookies could be sold next month if $2,000 were spent on an advertising campaign. Required Should the company proceed with the advertising campaign? Calculate the impact to operating income. |
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