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Q.1. The King Air Freshener Company of Waco, Texas, markets a single product in Waco and Dallas. Marketing expenses for the past year were: Sales
Q.1. The King Air Freshener Company of Waco, Texas, markets a single product in Waco and Dallas. Marketing expenses for the past year were:
Sales salaries | $75,000 |
Salespersons expenses | 21,500 |
Advertising | 24,000 |
Delivery expense | 30,000 |
Credit investigation expense | 7,000 |
Collection expense | 12,000 |
Total | 169,500 |
Additional information:
- The company has five salespersons, three in Dallas and two in Waco, and each is paid the same salary.
- The salespersons receive equal allowances for expenses, except that the Dallas salespersons each receive $500 per year extra for turnpike toll fees.
- All advertising is placed according to the number of subscribers to the Waco and Dallas daily newspapers, 150,000 and 450,000 respectively.
- Delivery is made by an outside agency which charges a flat annual fee. The agency made 5,000 deliveries (3,000 in Dallas, 2,000 in Waco) from a centrally located warehouse.
- 700 new customers were obtained (400 from Dallas, 300 from Waco).
- 6,000 customers remittances were received (4,500 from Dallas, 1,500 from Waco).
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