Vancouver Software Company has just received its sales expense report for January, which follows: Sales Expense Budget Item Amount (LO 3)

Sales COMMISSIONS ..........ccccescseeveeesveees $145,000 Sales staff salarieS...2.......cccccssteeeeee 40,000 Telephone and mailing ..............cc0cee 16,200 Building lease payMent..........cceee 20,000 Heat, light, Amd! Water ........cccsecereraecee ss 4,100 Packaging and delivery............0.cccceee 27,400 MeMreclallonietas ais cian eee tien 12,500 MASE IINGKG ONS Ulan iGreeeseee cnn: s ass 19,700 You have been asked to develop budgeted costs for the coming year. Since this month is typical, you decide to prepare an estimated budget for a typical month in the coming year, and you uncover the following additional data:

Sales volume is expected to increase by 5 percent.

Sales prices are expected to increase by 10 percent.

Commissions are based on a percentage of selling price.

Sales staff salaries will increase 4 percent next year regardless of sales volume.

Building rent is based on a five-year lease that expires in three years.

S&BB eTealepshonte a nd mailing expenses are scheduled to increase by 8 percent even with no change in sales volume. However, these costs are variable with the number of units sold, as are packaging and delivery costs.

© Heat, light, and water are scheduled to increase by 12 percent regardless of sales volume.

© Depreciation includes furniture and fixtures used by the sales staff. The company has just acquired an additional $19,000 in furniture that will be received at the start of next year and will be depreciated over a 10-year life using the straight-line method.

© Marketing consultant expenses were for a special advertising campaign that runs from time to time. During the coming year, the costs are expected to average $35,000 per month.

Required Prepare the company’s budget for sales expenses for a typical month in the coming year. (Round to nearest whole numbers.)