a company is formulating its marketing expense budget for the last quarter of the year. sales in units for the third quarter amounted to 3,200; sales volume for the fourth quarter is expected to increase by 10%. variable marketing expense per unit sold amount to approximately $0.10, paid in cash in month of sale. fixed marketing expense per month amount to $8,000 of salaries, $3,500 of depreciation (delivery trucks), and $1,600 of insurance (paid monthly). a. what is the total budgeted marketing expense for the fourth quarter of the year?b. what is the estimated cash payment for marketing expense for the fourth quarter?

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KhiradAfaq KhiradAfaq · Answer 1 · 2022-10-28T08:57:03+02:00

For the final three months of the year, a total planned marketing expense of $29,496 has been set.

For the fourth quarter, $21,996 is the anticipated cash payment for marketing expenses.

The required details for marketing expenses in given paragraph

a. Below is a computation of the fourth-quarter marketing spend budget.

2,640 total units sold

(2400 × 110%)

Variable marketing costs were $0.15 per unit sold.

$396 was spent overall on variable marketing.

$18,000 in constant marketing costs

wages ($6,000 x 3).

$7,500 Depreciation ($2,500 multiplied by 3).

The cost of insurance ($1,200 multiplied by three) is $3,600.

$29,100 was spent on fixed marketing expenses in total.

Marketing spend planned for

29,496 dollars for the fourth quarter.

b. Estimated cash payment for fourth-quarter marketing expenses equals budgeted marketing spend for fourth-quarter minus depreciation.

= $29,496 - $7500

= $21,996

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