L'Essence Cosmetics Company is planning a one-month campaign for June to promote sales of one of its two cosmetics products. A total of $147,000 has 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:

		Moisturizer		Perfume
Unit selling price		$65		$72
Unit production costs:
	Direct materials	$ 12		$15
	Direct labor	4		5
	Variable factory overhead	3		4
	Fixed factory overhead	6		8
	Total unit production costs	$25		$32
Unit variable selling expenses		21		19
Unit fixed selling expenses		12		7
	Total unit costs	$58		$58
Operating income per unit		$ 7		$ 14

No increase in facilities would be necessary to produce and sell the increased output. It is anticipated that 30,000 additional units of moisturizer or 25,000 additional units of perfume could be sold without changing the unit selling price of either product.

#3 options are: accepted/opposed -- correctly/erroneously -- moisturizer/perfume -- more/less -- moisturizer/perfume

1. Prepare a differential analysis as of June 15, 2014, to determine whether to promote moisturizer (Alternative 1) or perfume (Alternative 2). If an amount is zero, enter zero "0". Differential Analysis Promote Moisturizer (Alt. 1) or Promote Perfume (Alt. 2) June 15, 2014 Promote Moisturizer (Alternative 1 Promote Perfume (Alternative 2) Differential Effect on Income (Alternative 2 Revenues Costs: Direct materials Direct labor Variable factory overhead Variable selling expenses Sales promotion Income (Loss) 2. Determine whether to promote moisturizer (Alternative 1) or perfume (Alternative 2). Select 3. The sales manager had tentatively decided to promote perfume, estimating that operating income would be increased by $203,000 ($14 operating income per unit for 25,000 units, less promotion expenses of $147,000). The manager also believed that the selection of moisturizer would increase operating income only by, s63,000 ($7 operating income per unit for 30,000 units, less promotion expenses of $147,000). State briefly your reasons for supporting or opposing the tentative decision. The sales manager's tentative decision should be select The sales manager Select considered the full unit costs instead ofthe differential (additional) revenue and differential (additional) costs. An analysis similar to that presented in part (1)would lead to the selection of Select for the promotional campaign, since this alternative w contribute select to operating income than would be contributed by promoting Select