SPU, Ltd., has just received its sales expense report for January, which follows

Question

SPU, Ltd., has just received its sales expense report for January, which follows.

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:

Required:

Prepare a budget for sales expenses for a typical month in the coming year. (Do not round intermediate calculations.)

Item Amount Sales commissions $ 420,500 Sales staff salaries 86,400 Telephone and mailing 46,000 Building lease payment 70,000 Utilities 13,100 Packaging and delivery 74,000 Depreciation 34,750 Marketing consultants 57,190

Explanation / Answer

Calculation of Depreciation

Depreciation=Cost/Life

53000/10=$5300

Budgeted Selling Expenses Item Old Calculations Budgeted Typical Month Remarks Sales Commissions 420500 420500*114%*90% 431433 Increase in Sales Volume and Decrease in Sales Price Sales Staff Salaries 86400 86400*108% 89856 Increased Telephone and Mailing 46000 46000*108% 49680 Increased Buliding Lease Payment 70000 70000 70000 Remain Constant Utilities 13100 13100*103% 13493 Increased Packing and Delivery 74000 74000*114% 84360 Increased Depreciation 34750 34750+5300 40050 Note Marketing Consultants 57190 64500 64500 Given Total Budgeted Costs 801940 843372

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