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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![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-](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F128593f5-7ea4-4e3b-94cd-55abf91c7165%2F09d40dc1-a0c3-48ac-b5c9-bd8b3a5a17e3%2Fbdcta6r_processed.jpeg&w=3840&q=75)
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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F128593f5-7ea4-4e3b-94cd-55abf91c7165%2F09d40dc1-a0c3-48ac-b5c9-bd8b3a5a17e3%2Fztg76w_processed.jpeg&w=3840&q=75)
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
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
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.Recommended textbooks for you
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![Horngren's Cost Accounting: A Managerial Emphasis…](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
![Intermediate Accounting](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
![Financial and Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education