Assume that a marketing survey shows that a 7500 monthly

Reference no: EM13482097

A company has two product lines, shoes and hats. Costand revenue for each line for the current month follows:
                                                                                Product lines
                                                                               shoes         hats
sales......................................                          $ 800,000       $450,000
variable costs as a percentage ossales........      55%               28%
fixed costs traceable to productlines.........    $200,000         $ 250,000

The company incurs monthly fixed costs of $ 100,000 common toboth product lines.

Assume that a marketing survey shows that a $75,00 monthly advertising campaign focused on either product line should increasethat product line's monthly slaes by apprpx. $150,000. Do you recommend this additional advertising for either or both product lines? Show computations.

Reference no: EM13482097

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