Required: Prepare a budget for sales expenses for a typical month in the coming year. (Do not round Intermediate calculations. Round your Tinal 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
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.
![Problem 13-57 (Algo) Sales Expense Budget (LO 13-4)
SPU, Ltd., has just recelved its sales expense report for January, which follows.
Item
Amount
Sales commissions
$370, 500
9e,400
Sales staff salaries
Telephone and mailing
Building lease payment
51, 000
60,000
19,100
8e, 000
33,750
51,190
Utilities
Packaging and delivery
Depreciation
Marketing consultants
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:
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 salarles will increase 4 percent next year regardless of sales volume.
• Bullding rent is based on a five-year lease that expires in three years.
• Telephone and malling expenses are scheduled to Increase by 6 percent even with no change In sales volume. However, these
costs are varlable with the number of units sold, as are packaging and delivery costs.
Utilities costs are scheduled to increase by 4 percent regardless of sales volume.
• Depreclatlon Includes furniture and fixtures used by the sales staff. The company has Just acquired an additlonal $61,000 In
furniture that will be recelved at the start of next year and will be depreciated over a 10-year life using the stralght-line method.
• Marketing consultant expenses were for a special advertising campalgn that runs from time to time. During the coming year, these
costs are expected to average $64,500 per month.
Requlred:
Prepare a budget for sales expenses for a typical month in the coming year. (Do not round Intermedlate calculatlons. 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](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fce0bf1ce-a72f-4c39-9220-c140fca8fd2c%2Fea6257b4-431b-4851-8e98-345613c70e33%2F3se2fh5_processed.png&w=3840&q=75)
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