Matthew Gabon, the sales manager of Office Furniture Solutions, prepared the following budget for 2017:

Sales Department

Budgeted Costs, 2017

(Assuming Sales of $17,800,000)

Salaries (fixed) $400,000

Commissions (variable) 190,000

Advertising (fixed) 88,000

Charge for office space (fixed) 3,700

Office supplies & forms (variable) 2,100

Total $683,800

After he submitted his budget, the president of Office Furniture Solutions reviewed it and recommended that advertising be increased to $118,000. Further, she wanted Matthew to assume a sales level of $24,920,000. This level of sales is to be achieved without adding to the sales force.

Matthew's sales group occupies approximately 250 square feet of office space out of total administrative office space of 20,000 square feet. The $3,700 space charge in Matthew's budget is his share (allocated based on relative square feet) of the company's total cost of rent, utilities, and janitorial costs for the administrative office building.

Prepare a revised budget consistent with the president's recommendation.

Sales Department

Budgeted Costs, 2017

(Assuming Sales of $24,920,000)

Salaries $

Commissions

Advertising

Charge for office space

Office supplies & forms

Total $