Question: Based on AI Luxe recent budget report, discuss whether each cost items are discretionary costs, fixed costs. In other words, which cost item can be reduced or eliminated during the pandemic. What factors do you need to consider when making a cost-cut proposal?
Here is the budget report for the question.
Budget Report on Expenses for the First Quarter of 2020 January February March U/O Budget Actual U/O budget Budget Actual U/O budget Budget Actual budget Sales & Marketing Salaries Tradeshows Digital Marketing Expense Travel-Customer Sites $38,700 $20,000 $10,700 $2,000 $6,000 $43,300 $19,820 $15,700 $2.000 $5.780 $4,600 ($180) $5,000 SO ($220) $38,000 $20,000 $10,000 $2,000 $6,000 $32,359 $19,820 $8,020 $2,000 $2.519 ($5,641) ($180) ($1,980) $0 ($3,481) $24,000 $20,000 $0 $2,000 $2,000 $22,497 $19,820 $510 $2,000 $167 ($1,503) ($180) $510 $0 ($1,833) $43,100 $25,000 $18,100 $41,337 $25,450 $15,887 ($1,763) $450 ($2,213) $67,300 $25,000 $25,100 $65,967 $25,450 $23,317 ($1,333) $450 ($1,783) $43,100 $25,000 $18,100 $40,625 $25,450 $15,175 ($2,475) $450 ($2,925) General & Administrative Salaries Recurring Expense Legal and Professional Expense Office Supplies & Software Office Rent Misc.- Meals Bank Charges Nonrecurring Expense License Expense Auditing Insurance expense $12,000 $1,500 $4,000 $400 $200 $0 $0 $0 0 $10,000 $1,400 $4.000 $312 $175 SO $0 ($2,000) ($100) $0 ($88) ($25) $0 SO SO SO $19,000 $1,500 $4,000 $400 $200 $17,200 $10,000 $17,684 $1,200 $4,000 $258 $175 $17,200 10000 0 $7.200 ($1,316) ($300) $0 ($142) ($25) $0 $O $12,000 $1,500 $4,000 $400 $200 $0 $0 SO $0 $10,000 $1,000 $4,000 $0 $175 $0 SO $0 $0 ($2,000) ($500) SO ($400) ($25) $0 $0 $0 $0 $0 0 $0 SO $7.200 Research & Development Salaries Cloud computing Hardware Software Independent Contractors Total Monthly Expenses $94,500 $81,000 $4,500 $6.000 $500 $2,500 $91,007 $78,277 $4,000 $5,800 $450 $2,480 ($3,493) ($2,723) ($500) ($200) ($50) ($20) ($656) $94,500 $81,000 $4,500 $6,000.00 $500.00 $2,500 $89,863 $78,300 $3,500 $5,413 $450.00 $2,200 ($4,637) ($2,700) ($1,000) ($587) ($50) ($300) ($11,611) $94,500 $81,000 $4,500 $6,000 $500 $2,500 $161,600 $91,007 $78,277 $4,000 $5,800 $450 $2,480 $154,129 ($3,493) ($2,723) ($500) ($200) ($50) ($20) ($7,471) $176,300 $175,644 $199,800 $188,189 Budget Report on Expenses for the First Quarter of 2020 January February March U/O Budget Actual U/O budget Budget Actual U/O budget Budget Actual budget Sales & Marketing Salaries Tradeshows Digital Marketing Expense Travel-Customer Sites $38,700 $20,000 $10,700 $2,000 $6,000 $43,300 $19,820 $15,700 $2.000 $5.780 $4,600 ($180) $5,000 SO ($220) $38,000 $20,000 $10,000 $2,000 $6,000 $32,359 $19,820 $8,020 $2,000 $2.519 ($5,641) ($180) ($1,980) $0 ($3,481) $24,000 $20,000 $0 $2,000 $2,000 $22,497 $19,820 $510 $2,000 $167 ($1,503) ($180) $510 $0 ($1,833) $43,100 $25,000 $18,100 $41,337 $25,450 $15,887 ($1,763) $450 ($2,213) $67,300 $25,000 $25,100 $65,967 $25,450 $23,317 ($1,333) $450 ($1,783) $43,100 $25,000 $18,100 $40,625 $25,450 $15,175 ($2,475) $450 ($2,925) General & Administrative Salaries Recurring Expense Legal and Professional Expense Office Supplies & Software Office Rent Misc.- Meals Bank Charges Nonrecurring Expense License Expense Auditing Insurance expense $12,000 $1,500 $4,000 $400 $200 $0 $0 $0 0 $10,000 $1,400 $4.000 $312 $175 SO $0 ($2,000) ($100) $0 ($88) ($25) $0 SO SO SO $19,000 $1,500 $4,000 $400 $200 $17,200 $10,000 $17,684 $1,200 $4,000 $258 $175 $17,200 10000 0 $7.200 ($1,316) ($300) $0 ($142) ($25) $0 $O $12,000 $1,500 $4,000 $400 $200 $0 $0 SO $0 $10,000 $1,000 $4,000 $0 $175 $0 SO $0 $0 ($2,000) ($500) SO ($400) ($25) $0 $0 $0 $0 $0 0 $0 SO $7.200 Research & Development Salaries Cloud computing Hardware Software Independent Contractors Total Monthly Expenses $94,500 $81,000 $4,500 $6.000 $500 $2,500 $91,007 $78,277 $4,000 $5,800 $450 $2,480 ($3,493) ($2,723) ($500) ($200) ($50) ($20) ($656) $94,500 $81,000 $4,500 $6,000.00 $500.00 $2,500 $89,863 $78,300 $3,500 $5,413 $450.00 $2,200 ($4,637) ($2,700) ($1,000) ($587) ($50) ($300) ($11,611) $94,500 $81,000 $4,500 $6,000 $500 $2,500 $161,600 $91,007 $78,277 $4,000 $5,800 $450 $2,480 $154,129 ($3,493) ($2,723) ($500) ($200) ($50) ($20) ($7,471) $176,300 $175,644 $199,800 $188,189
