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Pam and Lenny's ice cream shop charges $1.55 for a cone. Variable expenses are $0.28 per cone, and fixed costs total $2.400 per month. A
Pam and Lenny's ice cream shop charges $1.55 for a cone. Variable expenses are $0.28 per cone, and fixed costs total $2.400 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 775 additional cones would be sold and that 975 cones would be given away, Advertising costs for the promotion would be $160. Required: a. Calculate the effect of the promotion on operating income for the second week of February (Do not round intermediate calculation and round your final answer to 2 decimal places.) Nel in operating income Increase decrease b. Do you think the promotion should occur? Yes No
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