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Required: 1. Prepare a differential analysis as of November 2 to determine whether to promote moisturizer (Alternative 1) or perfume (Alternative 2). If an amount is zero, enter "0". Differential Analysis Promote Moisturizer (Alt. 1) or Promote Perfume (Alt. 2) November 2 Promote Promote Differential Moisturizer Perfume Effects (Alternative 1) (Alternative 2) (Alternative 2) Revenues 1,400,000 V 1,650,000 250,000 V Costs: Direct materials -320,000 x -300,000 20,000 Direct labor -480,000 X -600,000 -120,000 x Variable factory overhead -150,000 X -150,000 Variable selling expenses -120,000 X -180,000 -60,000 Sales promotion -80,000 x -90,000 x -10,000 X Profit (loss) 250,000 330,000 80,000

Required: 1. Prepare a differential analysis as of November 2 to determine whether to promote moisturizer (Alternative 1) or perfume (Alternative 2). If an amount is zero, enter "0". Differential Analysis Promote Moisturizer (Alt. 1) or Promote Perfume (Alt. 2) November 2 Promote Promote Differential Moisturizer Perfume Effects (Alternative 1) (Alternative 2) (Alternative 2) Revenues 1,400,000 V 1,650,000 250,000 V Costs: Direct materials -320,000 x -300,000 20,000 Direct labor -480,000 X -600,000 -120,000 x Variable factory overhead -150,000 X -150,000 Variable selling expenses -120,000 X -180,000 -60,000 Sales promotion -80,000 x -90,000 x -10,000 X Profit (loss) 250,000 330,000 80,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Differential Analysis for Sales Promotion Proposal Kankakee Cosmetics Company is planning a one-month campaign for December to promote sales of one of its two cosmetics products. A total of $150,000 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 $35 $55 Unit production costs: Direct materials $(12) $(20) Direct labor (8) (10) Variable factory overhead (3) (6) Fixed factory overhead (2) (6) Total unit production costs $(25) $(42) Unit variable selling expenses (2) (3) Unit fixed selling expenses (2) (8) Total unit costs $(29) $(53) Operating income per unit $ 6 $ 2 No increase in facilities would be necessary to produce and sell the increased output. It is anticipated that 40,000 additional units of moisturizer or 30,000 additional units of perfume could be sold from the campaign without changing the unit selling price of either product. Required: 1. Prepare a differential analysis as of November 2 to determine whether to promote moisturizer (Alternative 1) or perfume (Alternative 2). If an amount is zero, enter "0".
Transcribed Image Text:Differential Analysis for Sales Promotion Proposal Kankakee Cosmetics Company is planning a one-month campaign for December to promote sales of one of its two cosmetics products. A total of $150,000 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 $35 $55 Unit production costs: Direct materials $(12) $(20) Direct labor (8) (10) Variable factory overhead (3) (6) Fixed factory overhead (2) (6) Total unit production costs $(25) $(42) Unit variable selling expenses (2) (3) Unit fixed selling expenses (2) (8) Total unit costs $(29) $(53) Operating income per unit $ 6 $ 2 No increase in facilities would be necessary to produce and sell the increased output. It is anticipated that 40,000 additional units of moisturizer or 30,000 additional units of perfume could be sold from the campaign without changing the unit selling price of either product. Required: 1. Prepare a differential analysis as of November 2 to determine whether to promote moisturizer (Alternative 1) or perfume (Alternative 2). If an amount is zero, enter "0".
Required: 1. Prepare a differential analysis as of November 2 to determine whether to promote moisturizer (Alternative 1) or perfume (Alternative 2). If an amount is zero, enter "0". Differential Analysis Promote Moisturizer (Alt. 1) or Promote Perfume (Alt. 2) November 2 Promote Promote Differential Moisturizer Perfume Effects (Alternative 1) (Alternative 2) (Alternative 2) Revenues 2$ 1,400,000 $1 1,650,000 250,000 Costs: Direct materials -320,000 -300,000 x 20,000 X Direct labor -480,000 X -600,000 X -120,000 X Variable factory overhead -150,000 X -150,000 X 0 X Variable selling expenses -120,000 -180,000 X -60,000 X Sales promotion -80,000 -90,000 X -10,000 X Profit (loss) 250,000 330,000 80,000
Transcribed Image Text:Required: 1. Prepare a differential analysis as of November 2 to determine whether to promote moisturizer (Alternative 1) or perfume (Alternative 2). If an amount is zero, enter "0". Differential Analysis Promote Moisturizer (Alt. 1) or Promote Perfume (Alt. 2) November 2 Promote Promote Differential Moisturizer Perfume Effects (Alternative 1) (Alternative 2) (Alternative 2) Revenues 2$ 1,400,000 $1 1,650,000 250,000 Costs: Direct materials -320,000 -300,000 x 20,000 X Direct labor -480,000 X -600,000 X -120,000 X Variable factory overhead -150,000 X -150,000 X 0 X Variable selling expenses -120,000 -180,000 X -60,000 X Sales promotion -80,000 -90,000 X -10,000 X Profit (loss) 250,000 330,000 80,000
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