Please help me to figure it out! Thanks! Differentlal Analysis Report for Sales
ID: 2410413 • Letter: P
Question
Please help me to figure it out! Thanks!
Differentlal Analysis Report for Sales Promotion Proposal Rocket Shoe Company is planning a one-month campaign for August to promote sales of one of its two shoe products. A total of $140,000 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. Cross Trainer Running Shoe Shoe Unit selling price $79 $87 Unit production costs: s (14) s(19) Direct materials Direct labor Variable factory overhead Fixed factory overhead Total unit praduction casts s(30) (25) (14) S(69) $[39) Unit variable selling expenses (23) Unit fixed selling expenses Total unit costs Operating income per unit No increase in facilities would be necessary to praduce and sell the increased output. It is anticipated that 20,000 additional units of cross-trainer shoes or 17,000 additional units of running shoes could be sold without changing the unit selling price $(71) 16 of either product.Explanation / Answer
Prepare differential analysis :
Cross trainer shoes Running shoes Differential revenue from proposals 1580000 1479000 Differential cost of proposals Direct material 280000 323000 Direct labour 100000 102000 Variable factory overhead 60000 85000 Variable selling expense 500000 391000 Sales promotion expense 140000 140000 Differential cost of proposals 1080000 1041000 Net differential income from propoed sales Promotion campaign 500000 438000