Differential Analysis Report for Sales Promotion ProposalRocket 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 hasbeen budgeted for advertising, contests, redeemable coupons, and other promotional activities. The following data have been assembled fortheir possible usefulness in deciding which of the products to select for the campaign.Unit selling priceUnit production costs:Cross-Trainer RunningShoeShoe$41$45Direct materials$ (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$ 9ated that 20.000 additional units of cross- Operating income per unit$ 4$ 9No 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-trainershoes and running shoes.Rocket Shoe CompanyProposals for Sales Promotion CampaignDifferential Analysis ReportDifferential revenue from proposalsDifferential cost of proposals:Direct materialsDirect laborVariable factory overheadVariable selling expensesSales promotion expensesDifferential cost of proposalsNet differential income from proposed sales promotion campaignCross-Trainer ShoesRunning ShoeQQ

Differential analysis is a decision-making technique used by businesses to compare the costs and…

Answered: Required: 1. Prepare a differential…

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

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 3PB

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