Neil Company would like to initiate an advertising campaign on one of the two products...
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Accounting
Neil Company would like to initiate an advertising campaign on one of the two products (X or Y) during the next month. The campaign would cost $15,000. Marketing studies indicate that such a campaign would increase sales of product X by $75,000 or increase sales of product Y by 100,000. X has a contribution margin ratio of 60% and Ys is 40%. X has also a Product segment margin ratio of 45% and Y has 35%.
a. Given this information, how much does each product X and Y result for increasing net income of Neil Company? Show the numbers for both X and Y separately Product X Product Y
b. Which product would you recommend that Neils company focus its advertising campaign, product X or Y? Show computations to support your answer. Based on this information, increased net income for Neil Company from the best profitable product, name the Product as X or Y would be:
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