Marketing Expense Budget

Timothy Donaghy has developed a unique formula for growing hair. His proprietary lotion, used regularly for 45 days, will grow hair in bald spots (with varying degrees of success). Timothy calls his lotion Hair-Again and is selling it via the telephone and Internet. His major form of marketing is through 15-minute infomercials and Internet advertising. Timothy sells each 16-ounce bottle of Hair-Again for $15 and pays a commission of 3 percent of sales to telephone operators who field the 1-800 phone calls from potential customers. Fixed marketing expenses for each quarter of the coming year include:

Internet banner ads	$7,500
Telephone operator time	5,000
Travel	2,000

In addition, early next year Timothy intends to film and show infomercials on television. He expects the cost to be $12,000 in quarters 1 and 2, and that the cost will rise to $25,000 in each of quarters 3 and 4. Timothy expects the following unit sales of Hair-Again:

Quarter 1	5,000
Quarter 2	15,000
Quarter 3	40,000
Quarter 4	35,000

Required:

1. Construct a marketing expense budget for Hair-Again for the coming year. Show total amounts by quarter and in total for the year. If required, round your answers to two decimal places.

Hair-Again
Marketing Expense Budget
For the Year Ended December 31
	Quarter 1	Quarter 2	Quarter 3	Quarter 4	Total
	fill in the blank 02ae3dfbdfb3ffe_2	fill in the blank 02ae3dfbdfb3ffe_3	fill in the blank 02ae3dfbdfb3ffe_4	fill in the blank 02ae3dfbdfb3ffe_5	fill in the blank 02ae3dfbdfb3ffe_6
	$fill in the blank 02ae3dfbdfb3ffe_8	$fill in the blank 02ae3dfbdfb3ffe_9	$fill in the blank 02ae3dfbdfb3ffe_10	$fill in the blank 02ae3dfbdfb3ffe_11	$fill in the blank 02ae3dfbdfb3ffe_12
Total variable expense	$fill in the blank 02ae3dfbdfb3ffe_13	$fill in the blank 02ae3dfbdfb3ffe_14	$fill in the blank 02ae3dfbdfb3ffe_15	$fill in the blank 02ae3dfbdfb3ffe_16	$fill in the blank 02ae3dfbdfb3ffe_17
Fixed marketing expense:
	$fill in the blank 02ae3dfbdfb3ffe_19	$fill in the blank 02ae3dfbdfb3ffe_20	$fill in the blank 02ae3dfbdfb3ffe_21	$fill in the blank 02ae3dfbdfb3ffe_22	$fill in the blank 02ae3dfbdfb3ffe_23
	fill in the blank 02ae3dfbdfb3ffe_25	fill in the blank 02ae3dfbdfb3ffe_26	fill in the blank 02ae3dfbdfb3ffe_27	fill in the blank 02ae3dfbdfb3ffe_28	fill in the blank 02ae3dfbdfb3ffe_29
	fill in the blank 02ae3dfbdfb3ffe_31	fill in the blank 02ae3dfbdfb3ffe_32	fill in the blank 02ae3dfbdfb3ffe_33	fill in the blank 02ae3dfbdfb3ffe_34	fill in the blank 02ae3dfbdfb3ffe_35
	fill in the blank 02ae3dfbdfb3ffe_37	fill in the blank 02ae3dfbdfb3ffe_38	fill in the blank 02ae3dfbdfb3ffe_39	fill in the blank 02ae3dfbdfb3ffe_40	fill in the blank 02ae3dfbdfb3ffe_41
Total fixed expense	$fill in the blank 02ae3dfbdfb3ffe_42	$fill in the blank 02ae3dfbdfb3ffe_43	$fill in the blank 02ae3dfbdfb3ffe_44	$fill in the blank 02ae3dfbdfb3ffe_45	$fill in the blank 02ae3dfbdfb3ffe_46
Total marketing expense	$fill in the blank 02ae3dfbdfb3ffe_47	$fill in the blank 02ae3dfbdfb3ffe_48	$fill in the blank 02ae3dfbdfb3ffe_49	$fill in the blank 02ae3dfbdfb3ffe_50	$fill in the blank 02ae3dfbdfb3ffe_51

2. What if the cost of internet ads rises to $16,000 in Quarters 2 through 4? How would that affect variable marketing expense? Fixed marketing expense? Total marketing expense? If no effect, enter "0" and select "no impact".

Variable marketing expense	$fill in the blank 93bbf3fb9f9000d_1
Fixed marketing expense	$fill in the blank 93bbf3fb9f9000d_3
Total marketing expense	$fill in the blank 93bbf3fb9f9000d_5