Question

SPU, Ltd., has just received its sales expense report for January, which follows Amount $390,500 86,400 Item Sales commissions 2.5 points Sales staff salaries Telephone and mailing Building lease payment 45,000 70,000 20,100 78,000 40,750 55,190 Skipped Utilities Packaging and delivery Depreciation Marketing consultants eBook 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: Print 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 References 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 6 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 5 percent regardless of sales volume. Depreciation includes furniture and fixtures used by the sales staff. The company has just acquired an additional $59,000 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.) Budgeted Typical Month Item Sales commissions Sales staff salaries Telephone and mailing Building lease payment Utilities Packaging and delivery Depreciation Marketing consultants $ Total budgeted costs

Answer 1

item	budgeted typical month
sales commissions (390,500+14%-10%)	400,653
sales staff salaries (86,400+4%)	89,856
telephone and mailing (45,000+14 % increase in sales volume )*106% since price increases by 6%	54,378
building lease payment (fixed)	70,000
utilities (20,100+5%)	21,105
packaging and delivery (78,000+14% increase in volume)	88,920
depreciation (40,750 + (5900/12 months))	41,242
marketing consultants	64,500
total budgeted costs	830,654