Question:

Marketing expense budget. Boston Corporation has just received its marketing expense report for March of the current year, which follows.

Item Amount

Sales Commissions............................................. $135,000

Sales Staff Salaries........................................................ 32,000

Telephone and Mailing................................................................... 16,200

Building Lease Payment................................ 20,000

Heat, Light, and Water........................................ 4,100

Packaging and Delivery......................................... 27,400

Depreciation........................................................ 12,500

Marketing Consultants...............,................... 19,700

You have been asked to develop budgeted costs for March of next year. Starting with the results for March of this year shown above, you learn the following expectations for next year:

* Sales volume should increase by 5 percent.

* Sales prices should increase by 10 percent.

* Commissions are based on a percentage of sales revenue.

* Sales staff salaries will increase 4 percent next year regardless of sales volume.

* Telephone and mailing expenses are scheduled to increase by 8 percent even with no change in sales volume. However, these costs are variable with the number of units sold.

* Packaging and delivery costs are not affected by inflation but are variable with the number of units sold.

* Building lease is based on a five-year lease that expires in three years.

* Heat, light, and water are scheduled to increase by 12 percent regardless of sales volume.

* Depreciation includes furniture and fixtures used by the sales staff. There will be no change in depreciation expense.

* Marketing consultant expenses were for a special advertising campaign that runs from time to time During the coming year, the costs are expected to average $35,000 per month

Prepare a budget for marketing expenses for a typical month in the coming year.

Show all calculations properly.