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Analysis of Product and Period Costs in Film Production: A Case Study of "Forrest Gump"

An analysis of product and period costs in the production of the movie "Forrest Gump."

Ethan Brown
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Analysis of Product and Period Costs in Film Production: A Case Study ofForrest Gump"2‐23Calculate expected costs(LO1) Helios Botanicals develops hybrid tea roses. A relative newcomer to thefield, Helios is looking for innovative ways to advertise its products to potential customers. RoseMayfield, sales manager and avid online shopper, wonders about advertising the company's roses onvarious gardening websites. She has contacted Kimland Media, Inc., an advertising firm specializing inInternet advertising campaigns, to explore some options.After meeting with Rose, Sami Landon, regional sales coordinator, has suggested that Helios use atargeted marketing strategy by placing banner ads on a few gardening websites. Helios would pay for theservice based primarily on the number of ad impressions (the number of times the ads are shown). Usingpast campaigns as a guide, Sami has prepared the following quarterly estimate for Helios.Banner ad development (5 banners per quarter)$5,000Banner ad placement$0.80 per thousand impressionsEstimated ad impressions2,000,000Banner ad click‐throughs$0.02 per click‐throughFrom past experience, KimlandMedia estimates that 10% of all viewers will “click through” the bannerad to Helios's website. Of those viewers who click through, Kimland estimates that 5% will actuallymake a purchase.Requireda.What is the expected total cost per quarter of Helios's Internet advertising campaign?

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Accounting

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