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i need help on question 7 Use the following information to answer Question (7) Lilac Cosmetics Company makes a variety of cosmetic and beauty products.

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Use the following information to answer Question (7) Lilac Cosmetics Company makes a variety of cosmetic and beauty products. The company is planning a promotional sales campaign of one of its two cosmetic products The campaign will last one month and Lilac has budgeted $45,000 for promotional activities. The following data have been assembled for purposes of deciding which of the product lines to select for the campaign. 10ycou Perfume $68.00 Cologne $47.00 (per unit) Selling Price Production Costs: Direct Materials Direct Labor Variable Overhead Fixed Overhead 18.00 12.00 5.00 12.00 7.00 3.00 2.00 37.00 21.00 4.00 26.00 Total Production Cost Variable Selling Expenses Fixed Selling Expenses Total Cost Operating Profit per Unit 12.00 3.00 41.00 1.00 59.00 9.00 F 9500 Does not include proposed promotional costs of $45,000 6.00 $ co cow No increase in production facilities would be necessary to produce and sell the budgeted volume of cologne or perfume. The extra activity will not increase existing fixed costs or disrupt existing production in any way. Lilac anticipates that 10,000 additional units of cologne or 10,500 additional units of perfume could be sold due to the promotional campaign. (7) Lilac: (a) is indifferent between promoting either product (b) should promote neither product because the incremental unit sales volume would not yield enough benefit to cover the $45,000 promotional campaign costs (e)should promote perfume because the increase in total company income is greater than would be obtained by promoting cologne (d) should promote cologne because the increase in total company income is greater than would be obtained by promoting perfume 4

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