Baxtar, Inc., manufactures three models of mattresses: the Sleepeze, the Plushette, and the Ultima. Forecast sales for
Question:
a. Salaries for his office (himself at $65,000, a marketing research assistant at $40,000, and an administrative assistant at $25,000) are budgeted for $130,000 next year.
b. Depreciation on the offices and equipment is $20,000 per year.
c. Office supplies and other expenses total $21,000 per year.
d. Advertising has been steady at $20,000 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 5 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 $50 per unit sold. Gene expects the Ultima line to ship for $75 per unit sold since this model features a larger mattress.
Required:
1. Suppose that Gene is considering three sales scenarios as follows:
Prepare a revenue budget for the sales division for the coming year for each scenario.
2. Prepare a flexible expense budget for the sales division for the three scenariosabove.
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Related Book For
Cost Management Accounting and Control
ISBN: 978-0324559675
6th Edition
Authors: Don R. Hansen, Maryanne M. Mowen, Liming Guan
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