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Management is surprised by the handbag product line's poor showing and would like to have...

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Accounting

Management is surprised by the handbag product line's poor showing and would like to have the product line segmented by
market. The following Information is avallable about the markets in which the handbag IIne is sold:
All of the handbag product line's selling and administrative expenses and depreciation are common to the markets in which the
product is sold. Prepare a contribution format segmented Income statement for the handbag product line with segments defined as
markets.
Refer to the statement prepared In (1) above. The sales manager wants to run a speclal promotional campalgn on one of the product
IInes over the next month. A marketing study Indicates that such a campaign would Increase sales of the Garments product IIne by
R215,000 or sales of the shoes product IIne by R160,000. The campalgn would cost R30,000.
a. Compute the Increased operating Income for these product IInes for the expected Increased sales.
b. Based on the above results, which product IIne should be chosen?
Shoes
Garments
image

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