Sales Forecast and Flexible Budget Olympus, Inc., manufactures three models of mattresses: the Sleepeze, the Plushette, and the Ultima. Forecast sales for next year are 15,070 for the Sleepeze, 12,670 for the Plushette, and 4,560 for the Ultima. Gene Dixon, vice president of sales, has provided the following information: a. Salaries for his office (including himself at $64,850, a marketing research assistant at $40,600, and an administrative assistant at $22,800) are budgeted for $128,250 next year. b. Depreciation on the offices and equipment is $21,900 per year. c. Office supplies and other expenses total $19,100 per year. d. Advertising has been steady at $18,700 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. e. Commissions on the Sleepeze and Plushette lines are 3 percent of sales. These commissions are paid to independent jobbers who sell the mattresses to retail stores. f. Last year, shipping for the Sleepeze and Plushette lines averaged $45 per unit sold. Gene expects the Ultima line to ship for $80 per unit sold since this model features a larger mattress. Required: 1. Suppose that Gene is considering three sales scenarios as follows: Pessimistic Expected Optimistic Price Quantity Price Quantity Price Quantity Sleepeze $175 12,570 $192 15,070 $192 18,390 Plushette 298 10,430 355 12,670 363 14,250 Ultima 930 1,940 1,040 4,560 1,210 4,560 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 2,199,750 $ 2,893,440 $ 3,530,880 Plushette 3,108,140 4,497,850 5,172,750 Ultima 1,804,200 4,742,400 5,517,600 Total sales 7,112,090 12,133,690 $ 14,221,230 2. Prepare a flexible expense budget for the Sales Division for the three scenarios above. If required, round answers to the nearest dollar. Olympus, Inc. Flexible Expense Budget For the Coming Year Pessimistic Expected Optimistic Salaries 128,250 $ 128,250 $ 128,250 Depreciation 21,900 21,900 21,900 Office supplies and other 19,100 19,100 19,100 Advertising: Sleepeze and Plushette 18,700 18,700 18,700 Ultima 270,630 711,360 827,640 Commissions 159,236 221,738 261,108 X Shipping: Sleepeze 573,750 678,150 827,550 Plushette 469,350 570,150 641,250 Ultima 155,200 384,800 364,800 Total 1,816,116 X $ 2,754,148 X $ 3,110,298