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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

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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 \$101,000 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: No increase in foelities would be necessary to produce and seli the increased output. It is anticipated that 18,000 additional units of tennis shoes or 15,000 additional units of waking shoes could be sold without changing the unit seiling price of either product. Required: 1. Prepare a differential analysis as of June 19 to determine whether to promote tennis shoes (Aiternative 1) or waiking shoes (Alternative 2), If an amount is zero; enter "O", Use a minus sign to indicate costs, If required, use a minus sign to indicate a loss. Differential Analysis Promote Tennis Shoes (Ait. 1) or Promote Walking Shoes (Ait, 2) 2. Determine whether to promote tennis shoes (Aternative 1) or walising shoes (Alternative 2). 3. The sales manager had tentatively decided to promote waking shoes, estimating that operating income would be increased by $79,000 ( $12 operating income per unit for 15,000 units, less promotion expenses of $101,000 ). The manager also believed that the selection of tennis shoes would reduce operating inceme by, $43,000 ( $8 operating income per unit for 18,000 units, less promotion expenses of $101,000 ). 5 tate briefy 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 simalar 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

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