Question
Pam and Lennys ice cream shop charges $1.25 for a cone. Variable expenses are $0.35 per cone, and fixed costs total $1,800 per month. A
Pam and Lennys ice cream shop charges $1.25 for a cone. Variable expenses are $0.35 per cone, and fixed costs total $1,800 per month. A sweetheart 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 400 additional cones would be sold and that 600 cones would be given away. Advertising costs for the promotion would be $120.
Calculate the effect of the promotion on operating income for the second week of February. (Do not round intermediate calculations.)
net increase in op inc. = it is not 170
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