Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

copy BIU A Merge & Center $ %) 128-98 3 Format Painter Clipboard Conditional Form Formatting Table Styles Font Alignment Number G K D N

image text in transcribed
copy BIU A Merge & Center $ %) 128-98 3 Format Painter Clipboard Conditional Form Formatting Table Styles Font Alignment Number G K D N L M o Basketballs R Us Operating Projection - What if? Jan 54,000 Feb 54,000 Mar 54,000 Apr 24,000 May 24,000 lun 24,000 Jul 24,000 Aug 24,000 Sep 45,000 Oct 45,000 Nov 75,000 Dec 90,000 Total 537,000 Gross Profit 18,000 5,000 18,000 5,000 18,000 5,000 1,000 10,000 18,000 5,000 1,000 10,000 18,000 5,000 1,000 10,000 18,000 5,000 1,000 10,000 18,000 5,000 1.000 10,000 Wage Expense Rent Expense Insurance Expense Advertising Expense Extra Advertising Exp Misc Expense Operating Expense 18.000 5,000 1,000 10,000 18,000 5,000 1.000 10,000 25,000 5,000 1,000 10,000 25,000 5,000 1,000 10,000 18,000 5,000 1,000 10,000 D 2,000 36,000 230,000 50,000 12,000 120,000 1,000 10,000 10,000 2,000 36,000 2,000 36,000 2,000 36,000 2,000 36,000 2,000 36,000 2,000 36,000 2.000 36,000 2,000 36,000 2,000 36,000 2,000 43,000 2,000 43,000 24,000 446,000 18,000 18,000 18,000 Net income (12,000) (12,000) (12,000) (13,000) (12,000) 9,000 9,000 32.000 47,000 $91.000 The second tab has the same worksheet, this time already completed, with three proposals (A, B, and C) to generate more sales by adding advertising dollars, or slashing prices, or both. All three proposals increase the number of basketballs sold - but only one results in increased profitability (or a smaller loss). Identify the best proposal Suppose the Marketing team at Basketballs R Us wants to increase sales during July & August; they offer three possible strategies. Evaluate them. Plan A: Increase advertising expense during July & August by $10,000 each month; they estimate that unit sales (volume) will increase to 11,000 units for those two months. Plan B: Decrease unit sell price during July & August from $10 per basketball to $8 per basketball they estimate that unit sales (volume) will double to 16,000 units for those two months. Plan C Increase advertising expense during July & August by $5,000 each month AND decrease the unit selling price from $10 per basketball to $9 per basketball they estimate that unit sales (volume) will double to 16,000 units for those two months

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting, Enhanced

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

11th Edition

1119594596, 9781119594598

More Books

Students also viewed these Accounting questions

Question

5 What does it mean to think of an organisation as an open system?

Answered: 1 week ago