1. Construct a marketing expense budget for Hair-Again for the coming year. Show total amounts by quarter and in total for the year. If required, round your answers to two decimal places.

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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5. Marketing Expense Budget

Timothy Donaghy has developed a unique formula for growing hair. His proprietary lotion, used regularly for 45 days, will grow hair in bald spots (with varying degrees of success). Timothy calls his lotion Hair-Again and is selling it via the telephone and Internet. His major form of marketing is through 15-minute infomercials and Internet advertising. Timothy sells each 16-ounce bottle of Hair-Again for $15 and pays a commission of 3 percent of sales to telephone operators who field the 1-800 phone calls from potential customers. Fixed marketing expenses for each quarter of the coming year include:

Internet banner ads $7,600
Telephone operator time 5,000
Travel 2,000

In addition, early next year Timothy intends to film and show infomercials on television. He expects the cost to be $12,000 in quarters 1 and 2, and that the cost will rise to $24,000 in each of quarters 3 and 4. Timothy expects the following unit sales of Hair-Again:

Quarter 1 5,000
Quarter 2 15,000
Quarter 3 40,000
Quarter 4 35,000

Required:

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1. Construct a marketing expense budget for Hair-Again for the coming year. Show total amounts by quarter and in total for the year. If required, round your answers to two decimal places.

Hair-AgainMarketing Expense BudgetFor the Year Ended December 31
  Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total
           
 
- Select - - Select - - Select - - Select - - Select -
 
$- Select - $- Select - $- Select - $- Select - $- Select -
Total variable expense $fill in the blank 600e3f021fb6faa_13 $fill in the blank 600e3f021fb6faa_14 $fill in the blank 600e3f021fb6faa_15 $fill in the blank 600e3f021fb6faa_16 $fill in the blank 600e3f021fb6faa_17
Fixed marketing expense:          
 
$- Select - $- Select - $- Select - $- Select - $- Select -
 
- Select - - Select - - Select - - Select - - Select -
 
- Select - - Select - - Select - - Select - - Select -
 
- Select - - Select - - Select - - Select - - Select -
Total fixed expense $fill in the blank 600e3f021fb6faa_42 $fill in the blank 600e3f021fb6faa_43 $fill in the blank 600e3f021fb6faa_44 $fill in the blank 600e3f021fb6faa_45 $fill in the blank 600e3f021fb6faa_46
Total marketing expense $fill in the blank 600e3f021fb6faa_47 $fill in the blank 600e3f021fb6faa_48 $fill in the blank 600e3f021fb6faa_49 $fill in the blank 600e3f021fb6faa_50 $fill in the blank 600e3f021fb6faa_51
 

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2. What if the cost of internet ads rises to $15,000 in Quarters 2 through 4? How would that affect variable marketing expense? Fixed marketing expense? Total marketing expense? If no effect, enter "0" and select "no impact".

Variable marketing expense $fill in the blank f4abc0fe0f8c015_1
 
Fixed marketing expense $fill in the blank f4abc0fe0f8c015_3
 
Total marketing expense $fill in the blank f4abc0fe0f8c015_5
 
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