Activity-Based Budget Olympus, Inc., manufactures three models of mattresses: the Sleepeze, the Plushette, and the Ultima. Forecast sales for next year are 15,080 for the Sleepeze, 11,810 for the Plushette, and 5,280 for the Ultima. Gene Dixon, vice president of sales, has provided the following information: a. Salaries for his office (including himself at $62,500, a marketing research assistant at $43,400, and an administrative assistant at $27,300) are budgeted for $133,200 next year. b. Depreciation on the offices and equipment is $19,850 per year. c. Office supplies and other expenses total $23,200 per year. d. Advertising has been steady at $18,900 per year. However, the Ultima is a new product and will require extensive advertising to educate consumers on the unique features of this high-end mattress. Gene believes the company should spend 10 percent of first-year Ultima sales for a print and television campaign. e. Commissions on the Sleepeze and Plushette lines are 5 percent of sales. These commissions are paid to independent jobbers who sell the mattresses to retail stores. f. Last year, shipping for the Sleepeze and Plushette lines averaged $55 per unit sold. Gene expects the Ultima line to ship for $80 per unit sold since this model features a larger mattress. Suppose that Gene is considering three sales scenarios as follows: Pessimistic Expected Optimistic Sleepeze Plushette Ultima 940 $187 12,350 306 10,300 365 2,220 1,060 Price Quantity Price Quantity Price Quantity $207 15,080 $207 17,870 11,810 377 13,930 5,280 1,230 5,280 Suppose Gene determines that next year's Sales Division activities include the following: Research-researching current and future conditions in the industry Shipping-arranging for shipping of mattresses and handling calls from purchasing agents at retail stores to trace shipments and correct errors