Olympus, Inc., manufactures three models of mattresses: the Sleepeze, the Plushette, and the Ultima. Forecast sales for next year are $15,000$ for the Sleepeze, $12,000$ for the Plushette, and $5,000$ for the Ultima. Gene Dixon, vice president of sales, has provided the following information:

Salaries for his office $($including himself at $$65,000,$ a marketing research assistant at $$40,000,$ and an administrative assistant at $$25,000)$ are budgeted for $$130,000$ next year.

Depreciation on the offices and equipment is $$20,000$ per year.

Office supplies and other expenses total $$21,000$ per year.

Advertising has been steady at $$20,000$ 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 $15$ percent of first$-$year Ultima sales for a print and television campaign.

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.

Last year, shipping for the Sleepeze and Plushette lines averaged $$50$ per unit sold. Gene expects the Ultima line to ship for $$75$ per unit sold since this model features a larger mattress.

Required:

Question Content Area

$1.$ Suppose that Gene is considering three sales scenarios as follows:

Pessimistic Expected Optimistic

Price Quantity Price Quantity Price Quantity

Sleepeze $$18012,500$ $$20015,000$ $$20018,000$

Plushette $30010,00035012,00036014,000$

Ultima $9002,0001,0005,0001,2005,000$

Prepare a revenue budget for the Sales Division for the coming year for each scenario.

Olympus, Inc.

Revenue Budget

For the Coming Year

Pessimistic Expected Optimistic

Sleepeze $fill in the blank c$5$e$94$b$088$ffb$024\_1$

$fill in the blank c$5$e$94$b$088$ffb$024\_2$

$fill in the blank c$5$e$94$b$088$ffb$024\_3$

Plushette fill in the blank c$5$e$94$b$088$ffb$024\_4$

fill in the blank c$5$e$94$b$088$ffb$024\_5$

fill in the blank c$5$e$94$b$088$ffb$024\_6$

Ultima fill in the blank c$5$e$94$b$088$ffb$024\_7$

fill in the blank c$5$e$94$b$088$ffb$024\_8$

fill in the blank c$5$e$94$b$088$ffb$024\_9$

Total sales $fill in the blank c$5$e$94$b$088$ffb$024\_10$

$fill in the blank c$5$e$94$b$088$ffb$024\_11$

$fill in the blank c$5$e$94$b$088$ffb$024\_12$

Question Content Area

$2.$ Prepare a flexible expense budget for the Sales Division for the three scenarios above.

Olympus, Inc.

Flexible Expense Budget

For the Coming Year

Pessimistic Expected Optimistic

Salaries $fill in the blank $1370$e$0$f$96077$fd$7\_1$

$fill in the blank $1370$e$0$f$96077$fd$7\_2$

$fill in the blank $1370$e$0$f$96077$fd$7\_3$

Depreciation fill in the blank $1370$e$0$f$96077$fd$7\_4$

fill in the blank $1370$e$0$f$96077$fd$7\_5$

fill in the blank $1370$e$0$f$96077$fd$7\_6$

Office supplies and other fill in the blank $1370$e$0$f$96077$fd$7\_7$

fill in the blank $1370$e$0$f$96077$fd$7\_8$

fill in the blank $1370$e$0$f$96077$fd$7\_9$

Advertising:

Sleepeze and Plushette fill in the blank $1370$e$0$f$96077$fd$7\_10$

fill in the blank $1370$e$0$f$96077$fd$7\_11$

fill in the blank $1370$e$0$f$96077$fd$7\_12$

Ultima fill in the blank $1370$e$0$f$96077$fd$7\_13$

fill in the blank $1370$e$0$f$96077$fd$7\_14$

fill in the blank $1370$e$0$f$96077$fd$7\_15$

Commissions fill in the blank $1370$e$0$f$96077$fd$7\_16$

fill in the blank $1370$e$0$f$96077$fd$7\_17$

fill in the blank $1370$e$0$f$96077$fd$7\_18$

Shipping:

Sleepeze fill in the blank $1370$e$0$f$96077$fd$7\_19$

fill in the blank $1370$e$0$f$96077$fd$7\_20$

fill in the blank $1370$e$0$f$96077$fd$7\_21$

Plushette fill in the blank $1370$e$0$f$96077$fd$7\_22$

fill in the blank $1370$e$0$f$96077$fd$7\_23$

fill in the blank $1370$e$0$f$96077$fd$7\_24$

Ultima fill in the blank $1370$e$0$f$96077$fd$7\_25$

fill in the blank $1370$e$0$f$96077$fd$7\_26$

fill in the blank $1370$e$0$f$96077$fd$7\_27$

Total $fill in the blank $1370$e$0$f$96077$fd$7\_28$

$fill in the blank $1370$e$0$f$96077$fd$7\_29$

$fill in the blank $1370$e$0$f$96077$fd$7\_30$