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Required: 1. Prepare a differential analysis report presenting the additional revenue and additional costs anticipated from the promotion of cross-trainer shoes and running shoes. Rocket Shoe Company

Required: 1. Prepare a differential analysis report presenting the additional revenue and additional costs anticipated from the promotion of cross-trainer shoes and running shoes. Rocket Shoe Company

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 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 $56,000 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. Unit selling price Unit production costs: Cross-Trainer Running Shoe Shoe $41 $45 Direct materials $ (8) $(10) Direct labor (3) (3) Variable factory overhead (2) (3) Fixed factory overhead (3) (4) Total unit production costs $(16) $(20) Unit variable selling expenses (13) (12) Unit fixed selling expenses (8) (4) Total unit costs $(37) $(36) Operating income per unit $ 4 $ 9 ated that 20.000 additional units of cross-
Transcribed Image Text:Differential 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 $56,000 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. Unit selling price Unit production costs: Cross-Trainer Running Shoe Shoe $41 $45 Direct materials $ (8) $(10) Direct labor (3) (3) Variable factory overhead (2) (3) Fixed factory overhead (3) (4) Total unit production costs $(16) $(20) Unit variable selling expenses (13) (12) Unit fixed selling expenses (8) (4) Total unit costs $(37) $(36) Operating income per unit $ 4 $ 9 ated that 20.000 additional units of cross-
Operating income per unit $ 4 $ 9 No increase in facilities would be necessary to produce 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 of either product. Required: 1. Prepare a differential analysis report presenting the additional revenue and additional costs anticipated from the promotion of cross-trainer shoes and running shoes. Rocket Shoe Company Proposals for Sales Promotion Campaign Differential Analysis Report Differential revenue from proposals Differential cost of proposals: Direct materials Direct labor Variable factory overhead Variable selling expenses Sales promotion expenses Differential cost of proposals Net differential income from proposed sales promotion campaign Cross-Trainer Shoes Running Shoe QQ
Transcribed Image Text:Operating income per unit $ 4 $ 9 No increase in facilities would be necessary to produce 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 of either product. Required: 1. Prepare a differential analysis report presenting the additional revenue and additional costs anticipated from the promotion of cross-trainer shoes and running shoes. Rocket Shoe Company Proposals for Sales Promotion Campaign Differential Analysis Report Differential revenue from proposals Differential cost of proposals: Direct materials Direct labor Variable factory overhead Variable selling expenses Sales promotion expenses Differential cost of proposals Net differential income from proposed sales promotion campaign Cross-Trainer Shoes Running Shoe QQ
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