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Differential Analysis for Sales Promotion Proposal Raisa Cosmetics Company is planning a one-month campaign for March to promote sales of one of its two cosmetics products. A total of $200,000 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: Direct materials Direct labor Variable factory overhead Fixed factory overhead Total unit production costs Unit variable selling expenses Unit fixed selling expenses Total unit costs Operating income per unit Moisturizer Perfume $15 $(2) (2) (1) (2) $24 (1) (1) $(9) $6 $(4) (4) (2) (6) $(7) $(16) (2) (3) $(21) $3 No increase in facilities would be necessary to produce and sell the increased output. It is anticipated that 75,000 additional units of moisturizer or 60,000 additional units of perfume could be sold from the campaign without changing the unit selling price of either product. Required:

Differential Analysis for Sales Promotion Proposal Raisa Cosmetics Company is planning a one-month campaign for March to promote sales of one of its two cosmetics products. A total of $200,000 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: Direct materials Direct labor Variable factory overhead Fixed factory overhead Total unit production costs Unit variable selling expenses Unit fixed selling expenses Total unit costs Operating income per unit Moisturizer Perfume $15 $(2) (2) (1) (2) $24 (1) (1) $(9) $6 $(4) (4) (2) (6) $(7) $(16) (2) (3) $(21) $3 No increase in facilities would be necessary to produce and sell the increased output. It is anticipated that 75,000 additional units of moisturizer or 60,000 additional units of perfume could be sold from the campaign without changing the unit selling price of either product. Required:

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter11: Differential Analysis And Product Pricing
Section: Chapter Questions
Problem 3PA: Differential analysis for sales promotion proposal Kankakee Cosmetics Company is planning a...
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Differential Analysis for Sales Promotion Proposal Raisa Cosmetics Company is planning a one-month campaign for March to promote sales of one of its two cosmetics products. A total of $200,000 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: Direct materials Direct labor Variable factory overhead Fixed factory overhead Total unit production costs Unit variable selling expenses Unit fixed selling expenses Total unit costs Operating income per unit Moisturizer Perfume $15 $(2) (2) (1) (2) $(7) $24 $(4) (4) (2) (6) $(16) (1) (2) (1) (3) $(9) $(21) $6 $3 No increase in facilities would be necessary to produce and sell the increased output. It is anticipated that 75,000 additional units of moisturizer or 60,000 additional units of perfume could be sold from the campaign without changing the unit selling price of either product. Required:
Transcribed Image Text:Differential Analysis for Sales Promotion Proposal Raisa Cosmetics Company is planning a one-month campaign for March to promote sales of one of its two cosmetics products. A total of $200,000 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: Direct materials Direct labor Variable factory overhead Fixed factory overhead Total unit production costs Unit variable selling expenses Unit fixed selling expenses Total unit costs Operating income per unit Moisturizer Perfume $15 $(2) (2) (1) (2) $(7) $24 $(4) (4) (2) (6) $(16) (1) (2) (1) (3) $(9) $(21) $6 $3 No increase in facilities would be necessary to produce and sell the increased output. It is anticipated that 75,000 additional units of moisturizer or 60,000 additional units of perfume could be sold from the campaign without changing the unit selling price of either product. Required:
Required: 1. Prepare a differential analysis as of February 17 to determine whether to promote moisturizer (Alternative 1) or perfume (Alternative 2). If an amount is zero, enter "0". If required, use a minus sign to indicate a loss. Line Item Description Revenues Costs: Differential Analysis Promote Moisturizer (Alt. 1) or Promote Perfume (Alt. 2) February 17 Direct materials Direct labor Variable factory overhead Variable selling expenses Sales promotion Profit (loss) Feedback Promote Moisturizer (Alternative 1) Promote Perfume Differential Effects (Alternative 2) (Alternative 2) 000 Check My Work 3. Compare the analysis completed above with the manager's tentative decision. 2. Determine whether to promote moisturizer (Alternative 1) or perfume (Alternative 2). Promote perfume
Transcribed Image Text:Required: 1. Prepare a differential analysis as of February 17 to determine whether to promote moisturizer (Alternative 1) or perfume (Alternative 2). If an amount is zero, enter "0". If required, use a minus sign to indicate a loss. Line Item Description Revenues Costs: Differential Analysis Promote Moisturizer (Alt. 1) or Promote Perfume (Alt. 2) February 17 Direct materials Direct labor Variable factory overhead Variable selling expenses Sales promotion Profit (loss) Feedback Promote Moisturizer (Alternative 1) Promote Perfume Differential Effects (Alternative 2) (Alternative 2) 000 Check My Work 3. Compare the analysis completed above with the manager's tentative decision. 2. Determine whether to promote moisturizer (Alternative 1) or perfume (Alternative 2). Promote perfume
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