CONOR MARKETING

Conor Marketing is in the business of marketing office systems to corporations as well as households. Melinda Brackson (the director responsible for the CPG Group) created a marketing plan which forecasts next years sales revenues to be $25 million. Meetings with sales indicate that 40% of the companys sales force will be dedicated to selling products of CPG Group. A 15% commission for sales reps will be issued on sales of home office systems. Under the new organizational structure, the CPG Groups will be charged with 40% of the budgeted sales force expenditure. The sales reps' budget for both the Corporate and CPG Groups is $7.5 million.

The advertising and promotional budget contains 3 elements:

a) Advertising for the magazine

b) Newspaper Ads with Conor Dealers

c) sales promotional material including product brochures, technical manuals, catalogs, and point-of-purchase displays. Production/media placement costs have a budget cap of $300,000. Cooperative advertising production costs have a budget cap of $100,000. The firm allocates 5% of company sales to dealers to promote its CPG offerings.

Please note: Dealers always use the complete cooperative advertising allowances.

The COO indicates that the direct costs of material and labor and direct factory overhead to produce the CPG Group line represents 50% of sales. Jim, accounting director, will assign $600,000 in indirect manufacturing overhead (e.g., depreciation, maintenance, etc.) to the product line and $300,000 for administrative overhead (clerical, telephone, office space, and so forth). Freight for the product line will average 8% of sales. Melinda's staff consists of two product executives and a marketing assistant. Salaries and fringe benefits for Melinda and her staff are $250,000 per year. Submission Guidelines

Prepare a pro forma income statement for the CPG Group given the information provided.

Please show every calculation. If the answer is not comprehensive and shows all work then it will not get full credit. Excel tables are requested to be pasted for the responses.

PRO FORMA Sales Cost of Goods Sold Marketing Expenses 1. 2. 3. [If there are more than 3 , please add below.] General \& Administrative Expenses 1. 2. 3. Net Profit Before (Income) Tax