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Jen and Barry's ice cream shop charges $ 1 . 5 for a cone. Variable expenses are $ 0 . 3 2 per cone, and
Jen and Barry's ice cream shop charges $ for a cone. Variable expenses are $ per cone, and fixed costs total $ per month. A Valentine's Day promotion is being planned for the second week of February. During this week, a person buying a cone at the regular price would receive a free cone for a friend. It is estimated that additional cones would be sold and that cones would be given away. Advertising costs for the promotion would be $ Required: a Calculate the effect of the promotion on operating income for the second week of February. b Do you think the promotion should occur?
Jen and Barry's ice cream shop charges $ for a cone. Variable expenses are $ per cone, and fixed
costs total $ per month. A Valentine's Day promotion is being planned for the second week of February.
During this week, a person buying a cone at the regular price would receive a free cone for a friend. It is
estimated that additional cones would be sold and that cones would be given away. Advertising
costs for the promotion would be $
Required:
a Calculate the effect of the promotion on operating income for the second week of February.
b Do you think the promotion should occur?
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