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Differential Annalysis 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 Annalysis 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 $164,000 has been budjeted for advertising, contests, redeemable coupons, and other promotional activities. The following data have been assembied for their possibie usefulness in deciding which of the product select for the campaign: No increase in facilities would be necessary to produce and sed the increased outout. It is anticipated thot 26,000 adctional units of teanis shoes or 22,000 additional units of walkong shoes could be sold without changing the unit seling price of ether product. 1. Prepare a differential analysis as of June 19 to determinve whether to promote tennis shoes (Altemative 1) or walking shoes (Aitemative 2), If an amount is 2ero, ente "0". Use a minus sign to indicate costs. If required, use a minus sign to indicate a loss. Differential Analysis Promote Tennis thoes (Ait. 1) or Promote Walking shoes (Alt. 2) 2. Determine whether to promote tennis shoes (Aternative 1) or walsing shoes (Avternative 23. 3. The saibs manager had tentatively decided to promote waliking thoes, estimathg that operating income would be increased by 3144,000 is14 operating income per? unit for 22;000 units, less promobon expenses of 3164,000). The manager also bellewed that the seiection of tennis shoes would reduce operating income by, 570,000 (\$9 operating income per unit for 26,000 units, less promotion expenses of 5164,000 ) State briefly your reasions for supporting or opposing the tentafive dechion. The saies manager's tentative oecision theuld be consicered the full unit costs instead of the differential (addiboasl) revenue arid oifterential (additional) conts. Mh analysis similar to that presented hi part (1) wolld lead to the seiection of foc the aromotiona? campalgn, becakise this aternarive will contributil to operabng inccitu than nould be contributed by peomoting

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