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SPU, Ltd., has just received its sales expense report for January, which follows. Item Amount Sales commissions $ 440,500 Sales staff salaries 88,400 Telephone and
SPU, Ltd., has just received its sales expense report for January, which follows.
Item | Amount | |
Sales commissions | $ | 440,500 |
Sales staff salaries | 88,400 | |
Telephone and mailing | 49,000 | |
Building lease payment | 60,000 | |
Utilities | 22,100 | |
Packaging and delivery | 83,000 | |
Depreciation | 37,750 | |
Marketing consultants | 60,190 | |
You have been asked to develop budgeted costs for the coming year. Because this month is typical, you decide to prepare an estimated budget for a typical month in the coming year and you uncover the following additional data:
- Sales volume is expected to increase by 14 percent.
- Sales prices are expected to decrease 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.
- Building rent is based on a five-year lease that expires in three years.
- 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, as are packaging and delivery costs.
- Utilities costs are scheduled to increase by 3 percent regardless of sales volume.
- Depreciation includes furniture and fixtures used by the sales staff. The company has just acquired an additional $51,000 in furniture that will be received at the start of next year and will be depreciated over a 10-year life using the straight-line method.
- Marketing consultant expenses were for a special advertising campaign that runs from time to time. During the coming year, these costs are expected to average $64,500 per month.
Required:
Prepare a budget for sales expenses for a typical month in the coming year. (Do not round intermediate calculations. Round your final answers to nearest whole dollar amount.)
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