WSR Inc WSR Inc

Multiple Choice

WSR Inc. WSR Inc. sells a variety of drink and food products including potato chips and sodas. The segmented income statements for these two products are as follows:
WSR's management is considering a special advertising campaign that will run during a major sporting event. The advertising campaign is expected to cost $30,000 and only one product can be featured. In-house marketing studies show that the campaign could increase sales of the soda division by $200,000 or increase sales of the chips division by $275,000.
Refer to the WSR Inc. information above. What will be the overall net effect on the company's total profits if the advertising focuses on chips?

A) Increase of $148,750
B) Increase of $275,000
C) Increase of $178,750
D) Increase of $245,000