Olympus, Incy monufactures three models of mattresses: the Sleepeze, the Plushette, and the Uitima. Forecast sales for next year are 15,320 for the Sieepeze, 12,480 for the Plushette, and 5,290 for the Uitims, Gene Dixon, vice president of sales, has provided the following information: 0. Salaries for his office (including himseif at $62,150, a marketing research assistant at 542,750 , and an administrative assistant at $26,250 ) are budgeted for $131,150 next year. b. Depreciation on the offices and equipment is $21,450 per year. c. Office supplies and other expenses total $19,450 per year. d. Advertising has been steady at $22,750 per year, However, the Uitima 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 20 percent of firstyear Uitima sales for a print and television campaign. e. Commissions on the Sleepeze and Plushette lines are 5 percent of soles. These commissions are paid to independent jobbers who sell the mattresses to retail stores. t. Last year, shipping for the sleepeze and Plushette lines averaged $50 per unit sold. Gene expects the Uitima line to ship for $70 per unit sold since this model features a larger mattress. Suppose that Gene is considering three soles scenarios as follows: Suppose Gene determines that next year's Sales Divislon activities include the following: Research-researching current and future conditions in the industry Shipping-arranging for shipping of mottresses and handing calls from purchasing agents at retall stores to trace shipments and correct errors Jobbers-coordineting the efforts of the independent jobbers who sell the mattresses Besic ads-placing print and television ads for the sleeptze ond Plushette lines Uithe ads-choosing end working wath the advertising agency on the Ultima account Otfice manogement-operoting the Sales Diviaion office The peicentage of time spent by each employee of the sislet Division on esch of the above activities is acivgen in the following tehle. apter 08 Homework of time spent by each employee of the Sales Division on each of the above activities is given in the following table: Additional information is as follows: a. Depreciation on the office equipment belongs to the office management activity. b. Of the $19,450 for office supplies and other expenses, 55,500 can be assigned to telephone costs which can be split avenly between the shipping and jobbers' activities, An additional $2,600 per year is attributable to Internet connections and fees, and the buk of these costs ( 70 percent) are assignable to research. The remainder is a cost of office management. All other office supplies and costs are assigned to the office management activity. Required: 1. Prepore an activity-based budget for next year by activity. Use the expected level of sales activity, If required, round answers to the nearest dollar. Bequired: 1. Prepare an activity-based budget for next year by activity. Use the expected ievel of sales activity. If required, round answers to the nearest doliar
