need help on hw 461354
Problem P1-3 Budgets in Managerial Accounting
Matthew Gabon, the sales manager Office Furniture Solutions, prepared the following budget for 2011:
Sales Department
Budgeted Costs, 2011 (Assuming Sales of $11,000,000)
Salaries $400,000 Fixed
Commissions $150,000 Variable
Advertising $75,000 Fixed
Charge for Office Space $3,000 Fixed
Office Supplied & Forms $2,000 Variable
Total $630,000
After he submitted his budget, the president of Office Furniture Solutions reviewed it and recommended that advertising be increased to $100,000. Further she wanted Matthew to assume a sales level of $11,000,000. The level of sales is to be achieved without adding to the sales force.
Matthew’s sales group occupies approximately 250 square feet of office space out of total administrative office space of 20,000 square feet. The $3,000 space charge in Matthew’s budget is his share (allocated based on relative square feet) of the company’s total cost of rent, utilities, and janitorial costs for the administrative office building.
Provide a revised budget consistent with the president’s recommendation.
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