en and Barry’s ice cream shop charges $1.7 for a cone. Variable expenses are $0.31 per cone, and fixed costs total $2,100 per month. A Valentine’s Day 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 600 additional cones would be sold and that 700 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. b. Do you think the promotion should occur?

en and Barry’s ice cream shop charges $1.7 for a cone. Variable expenses are $0.31 per cone, and fixed costs total $2,100 per month. A Valentine’s Day 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 600 additional cones would be sold and that 700 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. b. Do you think the promotion should occur?

Essentials Of Business Analytics

1st Edition

ISBN:9781285187273

Author:Camm, Jeff.

Publisher:Camm, Jeff.

Chapter11: Monte Carlo Simulation

Section: Chapter Questions

Problem 10P

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