Question: 1. Among the products sold by The Corner Store is a line of gizmos, consisting of three models. Data for a typical period are shown in the spreadsheet.
a. The sales manager has proposed an advertising campaign costing $15,000, which is expected to result in a one-time 10% increase in unit sales, with no change in sales mix. Would the advertising campaign be profitable? Explain briefly.
b. Another alternative is for the advertising to emphasize Model C. In that case, it is expected that the increase in unit sales would be: A, 10; B, 10; C 40. Would this yield a better result? Explain.
Selling price Cost Units sold
Model A $400 $250 550
Model B $675 $300 300
Model C $950 $450 150