Fundamental Accounting Principles 22th Edition by John Wild ,Ken Shaw,Barbara Chiappetta

تمرين 73

Apple and Google sell a variety of products, including smartphones and tablet computers. Some products are more profitable than others. Teams of employees in each company make advertising, investment, and product mix decisions. A certain portion of advertising for both companies is on a local basis to a target audience.
Required
1. Contact the local newspaper and ask the approximate cost of ad space (for example, cost of one page or one-half page of advertising) for a company's product or group of products (such as Apple iPads).
2. Estimate how many products this advertisement must sell to justify its cost. Begin by taking the product's sales price advertised for each company and assume a 20% contribution margin.
3. Prepare a half-page memorandum explaining the importance of effective advertising when making a product mix decision. Be prepared to present your ideas in class.