Parisian Cosmetics Company is planning a one-month campaign for September to promote sales of one of its two cosmetics products. A total of $144,555 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	$55.19	$59.44
Unit production costs:
Direct materials	$ 9.03	$13.90
Direct labor	3.00	4.91
Variable factory overhead	3.05	4.91
Fixed factory overhead	6.08	3.95
Total unit production costs	$21.16	$27.67
Unit variable selling expenses	16.02	14.92
Unit fixed selling expenses	12.02	5.95
Total unit costs	$49.20	$48.54
Operating income per unit	$ 5.99	$10.90

No increase in facilities would be necessary to produce and sell the increased output. It is anticipated that 22,000 additional units of moisturizer or 20,000 additional units of perfume could be sold from the campaign without changing the unit selling price of either product.

Differential Analysis

Promote Moisturizer (Alternative 1) or Promote Perfume (Alternative 2)

August 21

1		Promote Moisturizer	Promote Perfume	Differential Effect on Income
2		(Alternative 1)	(Alternative 2)	(Alternative 2)
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