Question Content Area 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: Question Content Area 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 Budgeted unit sales Budgeted unit sales Budgeted unit sales Budgeted unit sales Budgeted unit sales $Unit variable expense $Unit variable expense $Unit variable expense $Unit variable expense $Unit variable expense 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: $Internet ads $Internet ads $Internet ads $Internet ads $Internet ads Television time Television time Television time Television time Television time Telephone operators Telephone operators Telephone operators Telephone operators Telephone operators Travel Travel Travel Travel Travel 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 Question Content Area 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

Question Content Area 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: Question Content Area 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 Budgeted unit sales Budgeted unit sales Budgeted unit sales Budgeted unit sales Budgeted unit sales $Unit variable expense $Unit variable expense $Unit variable expense $Unit variable expense $Unit variable expense 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: $Internet ads $Internet ads $Internet ads $Internet ads $Internet ads Television time Television time Television time Television time Television time Telephone operators Telephone operators Telephone operators Telephone operators Telephone operators Travel Travel Travel Travel Travel 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 Question Content Area 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

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter8: Budgeting For Planning And Control

Section: Chapter Questions

Problem 2CE: Refer to Cornerstone Exercise 8.1, through Requirement 1. FlashKick requires ending inventory of...

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Question Content Area

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:

Question Content Area

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

	Budgeted unit sales	Budgeted unit sales	Budgeted unit sales	Budgeted unit sales	Budgeted unit sales
	$Unit variable expense	$Unit variable expense	$Unit variable expense	$Unit variable expense	$Unit variable expense
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:
	$Internet ads	$Internet ads	$Internet ads	$Internet ads	$Internet ads
	Television time	Television time	Television time	Television time	Television time
	Telephone operators	Telephone operators	Telephone operators	Telephone operators	Telephone operators
	Travel	Travel	Travel	Travel	Travel
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

Question Content Area

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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