Differential Analysis for Sales Promotion Proposal Parisian Cosmetics Company is planning a one-month campaign for September to promote sales of one of its two cosmetics products. A total of $123,000 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:       Moisturizer     Perfume Unit selling price   $58     $64   Unit production costs:           Direct materials $10   $14     Direct labor 4   5     Variable factory overhead 2   4     Fixed factory overhead 6   6     Total unit production costs $22   $29   Unit variable selling expenses 18   17   Unit fixed selling expenses 10   7     Total unit costs $50   $53   Operating income per unit $8   $11   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 18,000 additional units of perfume could be sold from the campaign without changing the unit selling price of either product. Required: 1a.  Prepare a differential analysis as of August 21. If an amount is zero, enter "0". Differential Analysis Promote Moisturizer (Alt. 1) or Promote Perfume (Alt. 2) August 21   Promote Moisturizer (Alternative 1) Promote Perfume (Alternative 2) Differential Effect on Income (Alternative 2) Revenues $fill in the blank 15198805804cf8e_1 $fill in the blank 15198805804cf8e_2 $fill in the blank 15198805804cf8e_3 Costs:       Direct materials fill in the blank 15198805804cf8e_4 fill in the blank 15198805804cf8e_5 fill in the blank 15198805804cf8e_6 Direct labor fill in the blank 15198805804cf8e_7 fill in the blank 15198805804cf8e_8 fill in the blank 15198805804cf8e_9 Variable factory overhead fill in the blank 15198805804cf8e_10 fill in the blank 15198805804cf8e_11 fill in the blank 15198805804cf8e_12 Variable selling expenses fill in the blank 15198805804cf8e_13 fill in the blank 15198805804cf8e_14 fill in the blank 15198805804cf8e_15 Sales promotion fill in the blank 15198805804cf8e_16 fill in the blank 15198805804cf8e_17 fill in the blank 15198805804cf8e_18 Income (Loss) $fill in the blank 15198805804cf8e_19 $fill in the blank 15198805804cf8e_20 $fill in the blank

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Topic Video
Question

Differential Analysis for Sales Promotion Proposal

Parisian Cosmetics Company is planning a one-month campaign for September to promote sales of one of its two cosmetics products. A total of $123,000 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:

      Moisturizer     Perfume
Unit selling price   $58     $64  
Unit production costs:        
  Direct materials $10   $14  
  Direct labor 4   5  
  Variable factory overhead 2   4  
  Fixed factory overhead 6   6  
  Total unit production costs $22   $29  
Unit variable selling expenses 18   17  
Unit fixed selling expenses 10   7  
  Total unit costs $50   $53  
Operating income per unit $8   $11  

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 18,000 additional units of perfume could be sold from the campaign without changing the unit selling price of either product.

Required:

1a.  Prepare a differential analysis as of August 21. If an amount is zero, enter "0".

Differential Analysis
Promote Moisturizer (Alt. 1) or Promote Perfume (Alt. 2)
August 21
  Promote
Moisturizer
(Alternative 1)
Promote
Perfume
(Alternative 2)
Differential
Effect on Income
(Alternative 2)
Revenues $fill in the blank 15198805804cf8e_1 $fill in the blank 15198805804cf8e_2 $fill in the blank 15198805804cf8e_3
Costs:      
Direct materials fill in the blank 15198805804cf8e_4 fill in the blank 15198805804cf8e_5 fill in the blank 15198805804cf8e_6
Direct labor fill in the blank 15198805804cf8e_7 fill in the blank 15198805804cf8e_8 fill in the blank 15198805804cf8e_9
Variable factory overhead fill in the blank 15198805804cf8e_10 fill in the blank 15198805804cf8e_11 fill in the blank 15198805804cf8e_12
Variable selling expenses fill in the blank 15198805804cf8e_13 fill in the blank 15198805804cf8e_14 fill in the blank 15198805804cf8e_15
Sales promotion fill in the blank 15198805804cf8e_16 fill in the blank 15198805804cf8e_17 fill in the blank 15198805804cf8e_18
Income (Loss) $fill in the blank 15198805804cf8e_19 $fill in the blank 15198805804cf8e_20 $fill in the blank 15198805804cf8e_21
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Performance measurements
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education