Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Differential Analysis for Sales Promotion Proposal Sole Mates Inc, is planning a one-month campaign for July to promote sales of one of its two shoe

image text in transcribed
image text in transcribed
image text in transcribed
Differential Analysis for Sales Promotion Proposal Sole Mates Inc, is planning a one-month campaign for July to promote sales of one of its two shoe products. A total of 584,000 has been budgeted for advertising. contests, redeemable cou motional activities. The following dota have been assembled for their possible usefulness in decleting which of the products t No increase in facilities would be necessary to produce and sell the increased outpot. It is anticipated that 20,000 additional units af tennis shoer or 17,000 addiecoal units of walking shoes could be sold without changing the unit selling price of either product. 1. Prepare a differential analysis as of June 19 to determine whether to promote tennis shoes (Alternative 1 ) or walking shces (Alternative 2). If an amount is zero, enter 0. Use a minus sign to indicate costs. If required, use a minus sign to indicate a loss. Differential Analysis Promote Tennis Shoes (Alt, 1) or Promote Walking Shoes (Alt. 2) 2. Determine whether to promote tennis shoes (Alternative 1) or waliing shoes (Alternative 2). 3. The sales manager had tentatively decided to promote walking shoes, estimating that operating income would be increased by 569,000 ( 99 operating income per uni) for 17,000 units, less promotion expenses of $84,000 ). The manager also believed that the selection of tennis shoes would reduce operating income by, $36,000 ( $6 operating income per unit for 20,000 units, less promotion expenses of $84,000 ). 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 instesd of the differential (additional) revenue and differential (additional) costs. An analysis similar to that presented in part (1) would iead to the selection or for the promotional campoign, because this altemative will contribute to operating income than would be contributed by promoting

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

Managerial Accounting Tools For Business Decision Making Wileyplus Lms Student Package

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

8th Edition

1119390249, 978-1119390244

More Books

Students also viewed these Accounting questions

Question

Explain all drawbacks of application procedure.

Answered: 1 week ago

Question

Explain the testing process of accounting 2?

Answered: 1 week ago

Question

7. Understand the challenges of multilingualism.

Answered: 1 week ago

Question

5. Give examples of variations in contextual rules.

Answered: 1 week ago