Essence of Esther Cosmetics Company is planning a one-month campaign for September to promote sales of one of its two cosmetics products. A total ofhas 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:

_____________________________________Mositurizer_______Perfume

Unit selling price $48 $52

Unit Production costs:

Direct materials $8 $13

Direct labor 3 4

Variable factory overhead 2 4

Fixed factory overhead 6 4

Total unit production costs $19 $25

Unit variable selling expenses 14 13

Unit fixed selling expenses 10 5

Total unit costs $43 $43

Operating income per unit $5 $9

No increase in facilities would be necessary to produce and sell the increased output. It is anticipated thatadditional units of moisturizer oradditional units of perfume could be sold without changing the unit selling price of either product.

A. Prepare a differential analysis as of August 21, 2014, to determine whether to promote moisturizer (Alternative 1) or perfume (Alternative 2).

B.The sales manager had tentatively decided to promote perfume, estimating that operating income would be increased by(operating income per unit for, less promotion expenses of). The manager also believed that the selection of moisturizer would reduce operating income by(operating income per unit for, less promotion expenses of). State briefly your reasons for supporting or opposing the tentative decision.