Determine whether to promote tennis shoes (Alternative 1) or walking shoes (Alternative 2).

3. The sales manager had tentatively decided to promote walking shoes, estimating that operating income would be increased by $121,000 ($14 operating income per unit for 19,000 units, less promotion expenses of $145,000). The manager also believed that the selection of tennis shoes would increase operating income only by, $62,000 ($9 operating income per unit for 23,000 units, less promotion expenses of $145,000). State briefly your reasons for supporting or opposing the tentative decision.

The sales manager's tentative decision should be

%. The sales manager.

considered the full unit costs

instead of the differential (additional) revenue and differential (additional) costs. An analysis similar to that presented in part (1) would lead to the selection of

for the promotional campaign, because this alternative will contribute

to operating income

than would be contributed by promoting