Refer to E6.17. Assume that Kallsen pays its sales personnel a commission of 4 percent of sales and that other marketing costs are estimated at $20,000 per month. What is the expected marketing cost each month?

Data from E6.17

Kallsen Enterprises, in its first year of operations, has provided the following estimated sales information:
Month 1 ........................     $150,000.
Month 2 ........................       160,000.
Month 3 ........................       170,000.
Based on past experience with similar companies, the manager believes that 55 percent of sales will be collected in the month of sale while the remaining 45 percent will be collected in the month following the sale. What is the expected accounts receivable balance each month?