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Pam and Lenny's 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 Lenny's 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. Required a. Calculate the effect of the promotion on operating income for the second week of February. (Do not round intermediate calculations.) in operating income b. Do you think the promotion should occur? O Yes O No
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