Fun Treats Inc. sell a variety of drink and food products including juice and ice cream. The segmented income statements for these two products are as follows:
The company's management is considering a special advertising campaign that will run on a Saturday morning when many children are watching television. The advertising campaign is expected to cost $25,000 and only one product can be featured. In-house marketing studies show that the campaign could increase sales of the juice division by $100,000 or increase sales of the ice cream division by $100,000.
The marketing supervisor has decided that since both products have the same segment margin, the company will be equally as well off regardless of which product is featured.
Required:

Question

Fun Treats Inc. sell a variety of drink and food products including juice and ice cream. The segmented income statements for these two products are as follows:
  The company's management is considering a special advertising campaign that will run on a Saturday morning when many children are watching television. The advertising campaign is expected to cost $25,000 and only one product can be featured. In-house marketing studies show that the campaign could increase sales of the juice division by $100,000 or increase sales of the ice cream division by $100,000.
The marketing supervisor has decided that since both products have the same segment margin, the company will be equally as well off regardless of which product is featured.
Required:

Quizplus · Accepted Answer

The Answer of Fun Treats Inc. sell a variety of drink and food products including juice and ice cream. The segmented income statements for these two products are as follows:
  The company's management is considering a special advertising campaign that will run on a Saturday morning when many children are watching television. The advertising campaign is expected to cost $25,000 and only one product can be featured. In-house marketing studies show that the campaign could increase sales of the juice division by $100,000 or increase sales of the ice cream division by $100,000.
The marketing supervisor has decided that since both products have the same segment margin, the company will be equally as well off regardless of which product is featured.
Required: