1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Anni [7]
3 years ago
7

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 $35.00 $55.00
Unit production costs:

Direct materials $12.00 $20.00
Direct labor 8.00 10.00
Variable factory overhead 3.00 6.00
Fixed factory overhead 2.00 6.00
Total unit production costs $25.00 $42.00
Unit variable selling expenses 2.00 3.00
Unit fixed selling expenses 2.00 8.00
Total unit costs $29.00 $53.00
Operating income per unit $6.00 $2.00
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:
Prepare a differential analysis as of November 2 to determine whether to promote moisturizer (Alternative 1) or perfume (Alternative 2).
Business
1 answer:
Masja [62]3 years ago
6 0

Answer:

Kankakee Cosmetics Company

Differential Analysis for Moisturizer:

Relevant Costs:

Direct Materials $12.00

Direct labor $8.00

Var. Factory O/H $3.00

Var. selling expenses $2.00

Total Variable costs = $25.00

Unit Selling price = $35.00

Contribution = $10.00

Total contribution = $400,000

Advertising, etc. = $150,000

Differential Profit = $250,000

Differential Analysis for Perfume:

Relevant Costs:

Direct Materials $20.000

Direct labor $10.00

Var. Factory O/H $6.00

Var. selling expenses $3.00

Total Variable costs = $39.00

Unit Selling price = $55.00

Contribution = $16.00

Total contribution = $480,000

Advertising, etc. = $150,000

Differential Profit = $330,000

Explanation:

A differential analysis is a managerial accounting technique that considers factors that are unique to each decision and uses those factors to arrive at a decision.

It is also called incremental analysis.  In the analysis, differential revenue of each alternative and their differential costs are compared to find the alternative that yields the greater profits.

Fixed costs or sunk costs are not taken into account with this type of analysis.  Only the variable costs are considered, because they make the differences.

You might be interested in
Can I earn by brainly?
Snowcat [4.5K]

Answer:

huh?

Explanation:

4 0
3 years ago
Read 2 more answers
The County Auditor is the Chief ____ Officer of a county.
Leto [7]

Answer:

The County Auditor is the Chief <u>Fiscal</u> Officer of a county.

Explanation:

The County Auditor is Chief Fiscal Officer of the county. The primary responsibility of the county auditor is to account from the receipts and collection of funds by the county to the disperment of the funds to different county agencies. The county auditor also maintains the records of the movement of the county assets.

3 0
3 years ago
Which of the following characterizes how conditions in China have challenged the world's food supply?
Ratling [72]

Answer:China is an extremely health conscious nation, and many people are vegetarians.

Explanation: i guessed

6 0
2 years ago
I can only put away $2,000 a year toward retirement. I am 25 and plan on retiring at 65 and earning 5%. How much will I have at
Scorpion4ik [409]

Answer: $241,600

Explanation:

As this amount is a constant amount, it is an annuity. To find out the total amount after a certain period of time, use the future value of annuity formula.

Future value of annuity = Amount * [ {( 1 + rate) ^number of periods - 1} / rate]

Number of periods = 65 - 25 = 40

Future value of annuity = 2,000 * [ {(1 + 5%)⁴⁰ - 1} / 5%]

= 241,599.54

= $241,600

3 0
3 years ago
Why is a price floor set above an equilibrium price tends to cause persistent imbalances in the market?
kotykmax [81]

Answer:

A price floor set above the equilibrium price will result in a surplus of supply.  

Explanation.

An equilibrium price refers to the price at which demand for a service or product is equivalent to the quantity of the product or service supplied in the market.

Setting a price floor above the equilibrium price essentially means that the set prices will be higher than what demand is willing to pay for the product or service. Demand will therefore purchase fewer quantity of the product offered by supply at the prevailing price than they would have at equilibrium price.

Since the price floor will raise the product price to considerably higher than the equilibrium price, supply will be willing to provide higher volumes of the product at the prevailing price than at equilibrium price.

This will lead to a mismatch in the market between supply and demand resulting into a surplus.

5 0
3 years ago
Other questions:
  • Unlike advertising, public relations Multiple Choice supports promotional efforts by generating free media attention and goodwil
    12·1 answer
  • Ron shaich and his management team decided that after a period of expansion, perhaps some of the companies they had acquired or
    5·2 answers
  • Which of the following is a requirement for the Safety Data Sheet (SDS)?
    13·2 answers
  • Entrepreneurs' intentions are based on their perception of feasibility rather than someone else's impression of whether it is fe
    13·1 answer
  • The following credit sales are budgeted by Terra Co.: January $204,000 February 300,000 March 420,000 April 360,000The company's
    13·1 answer
  • Green, Inc., provides group term life insurance for all of its employees. The coverage equals twice the employee's annual salary
    5·1 answer
  • Consider golfers who led the Professional Golfers' Association of America (PGA) in winnings at different points in time. Note th
    6·1 answer
  • In the Hausser Food Products case, which type of organizational structure might have prevented the Florida sales team from withh
    9·1 answer
  • Eassy on important of computer education​
    12·2 answers
  • The present value of cash flow will be greater if we compound less frequently holding the stated interest rate constant. a. true
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!