Cost Management 6th Edition by Edward Blocher,David Stout ,Paul Juras,Gary Cokins

Exercise 14

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 are expected to increase by 10 percent. Variable marketing expenses per unit sold amount to approximately $0.05, paid in cash in month of sale. Fixed marketing expenses 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 marketing expenses for the fourth quarter