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Differential .Analysis for Sales Promotion Proposal Essence Cosmetics Company is planning a one-month campaign for June to promote sales of one of its two cosmetics
Differential .Analysis for Sales Promotion Proposal Essence Cosmetics Company is planning a one-month campaign for June to promote sales of one of its two cosmetics products. A total of $158,000 has been budgeted for advertising, contests, redeemable coupons, and other promotional activities. The following data have been assembled for their possible usefulness in deciding which of the products to select for the campaign: Moisturizer Perfume Unit selling price $74 $81 nit production costs: Direct materials $ 13 $17 Direct labor 4 6 Variable factory overhead 3 4 Fixed factory overhead 8 9 Total unit production costs $28 $36 Unit variable selling expenses 24 22 Unit fixed selling expenses 13 9 Total unit costs $65 $67 Operating income per unit $ 9 $ 14 No increase in facilities would be necessary to produce and sell the increased output. It is anticipated that 25,000 additional units of moisturizer or 21,000 additional units of perfume could be sold without changing the unit selling price of either product. Required: Hide Prepare a differential analysis as of June 15, 2014, to determine whether to promote moisturizer (Alternative 1) or perfume (Alternative 2). If an amount is zero, enter zero "0
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