Business, 05.07.2021 19:30 willcohen42
Pam and Lennyâs ice cream shop charges $1.6 for a cone. Variable expenses are $0.35 per cone, and fixed costs total $2,200 per month. A "sweetheart" promotion is being planned for the second week of February. During this week, a person buying a cone at the regular price would receive a free cone for a friend. It is estimated that 650 additional cones would be sold and that 850 cones would be given away. Advertising costs for the promotion would be $165.
Required:
a. Calculate the effect of the promotion on operating income for the second week of February.
b. Do you think the promotion should occur? Explain your answer.
Answers: 2
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Pam and Lennyâs ice cream shop charges $1.6 for a cone. Variable expenses are $0.35 per cone, and fi...
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