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Differential Analysis for Sales Promotion Proposal Sole Mates Inc. is planining 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 planining a one-month campaign for July to promote sales of one of its two shoe products, A total of $129,000 has been budgeted for advertising, conterts, redeemable coupons, and other promotional activites. The following data have been assembled for their possible usefulness in deciding which of the products to select for the carmparing No increase in facities would be necessary to groduce and sell the increased output. It is articipated that 23,000 additionat units of tennis shoes or 19 , 000 adotbonaf 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 whother to promote tennis shoes (Artemative 1) or walking shoes (Alernative 2): if an amount is zero, enter " 0 ", Use, a minus sign to indicate costs. If required, use a mimus sign to indicate a loss. Differential Analysis Promote Tennis Shoes (Ait, 1) or Promote Walking Sbides (Alt, 2) 2. 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 incone would be increased by $118,000 ( $13 operating income per unit for 19,000 units, less promobion expenses of $129,000 ). The manager also believed that the selection of tennis shoes would reduce operating income by, $55,000 ( $8 operating income per unit for 23,000 unsts, less promotion experses of 5129,000 ). State brielly your reasons for supporting or opposing the tentatrve decsion. The soles manoger's teotative decision should be The sales manager considered the full unet costs insteod of the differential (addibonal) revenue and differental (additional) costs. An analvus similar to that presented in part (1) would lead to the selection of campaign, becauye this altemotive will contrbute to operating income than would be contrbuted by fromoting

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