A company is formulating its marketing expense budget for the last quarter of the year. Sales in unitsfor the third quarter amounted to 4,000; sales volume for the fourth quarter is expected to increaseby 10%. Variable marketing expense per unit sold amount to approximately $0.05, paid in cash inmonth of sale. Fixed marketing expense per month amount to $10,000 of salaries, $5,000 of depreciation (delivery trucks), and $2,000 of insurance (paid monthly). What is the total budgeted marketing expense for the fourth quarter of the year? What is the estimated cash payment for marketingexpense for the fourth quarter?
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
A company is formulating its marketing expense budget for the last quarter of the year. Sales in units
for the third quarter amounted to 4,000; sales volume for the fourth quarter is expected to increase
by 10%. Variable marketing expense per unit sold amount to approximately $0.05, paid in cash in
month of sale. Fixed marketing expense per month amount to $10,000 of salaries, $5,000 of
expense for the fourth quarter?
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