Question

Game Device resident of sales, hasrovided the following information Olympus Inc., manufactures the models of the these and the Forecast sales for next year are 15.170 for the 11,000 for the h a nds. for the a. Salaries for his i ncluding a marketing research 541, 10, and an administrative $27,050) red d for $132.950 b. Depreciation on the offices and is $18.200 per year. solice wpples and other total $18,300 per year. d. Adverghs B e ady 10,200 pr . However, the ultima is a new product and will require extensive advertising to educate consumers on the w e s of thigh and mattress. Gan be . Common th an Plese percoss Th r ead to independents who will the matters Last year, hing for the end Plus od 45 punod Gup s the time to ship for $25 per und since the features a mattress the company should spend 20 round of year ultima fowa w and television campaign Suppose that consider the sound as follows: S Pessimisti c Price Quantity Price 5 122 12,2018 100 10,30 348 70 2,00 0 Optimistic Quantity Price Quantity 15.10 $182 18.110 11,900 3 56 14,100 55001150 5.500 Pushte and un conce r Rearch Assistant Administrative Assistant Gume 1015 15 Bade made Office management Additional information follow a. Depreciation on the offic b. or the $1,100 for how belongs to the office management activity. and the can d to phones which can be split evenly be on the shipping and job activities. An additional $2.000 p ais attributable tenet connections and foes, and the bulk of the conte nt to the mainder a cost of office management All other s and conte n t to the oceanent activity, Required: year by activity. Use the expected val of activity f o und answers to the nearest dollar 1. Prepare an activity for Olympus Inc. Activity Budget For Next Year ETIK 2. On the basis of the budou redi m en 1advise G r ading actions that might be taken to reduce experts

Answer 1

Part 1

Activity-based budget:

Research:
Salary	28945 (41350*70%)
Internet connections	1400 (2000*70%)	30345
Shipping:
Salaries	20105 (63650*25%)+(27950*15%)
Telephone	2650 (5300/2)
Ship Sleepeze	682650 (15170*45)
Ship Plushette	535500 (11900*45)
Ship Ultima	412500 (5500*75)	1653405
Jobbers:
Salaries	19555 ((63650*10%)+(41350*15%)+(27950*25%))
Telephone	2650 (5300/2)
Commissions	279120 ((15170*187)+(11900*348))*4%)	301325
Basic ads:
Salaries	14588 ((41350*15%)+(27950*30%))
Advertising	19200	33788
Ultima ads:
Salaries	21890 ((63650*30%)+(27950*10%))
Advertising	1056000 ((5500*960)*20%)	1077890
Office management:
Salaries	27868 ((63650*35%)+(27950*20%))
Depreciation	18200
Office Supplies	11300 (18300-5300-(2000*85%))	57368
Total		3154121

Part 2

The above calculation states the shipping is the most costly activity among the all. Next to it in terms of expensive activities are Ultima advertising and commissions to jobbers. Thus it is advisable to investigate shipping costs and try to control them. It is difficult to reduce the Ultima advertising in the very first year. It can make use of direct selling to retail stores by making used of salaried sales staff and cut the advertising cost.