After he submitted his budget the president of office

Reference no: EM13598690

Matthew Gabon, the sales manager of Office Furniture Solutions, prepared the following budget for 2008:

Sales Department
- Budgets Costs, 2008
- (Assuming Sales of $12M)
Salaries (fixed) $500,000
- Commissions (variable) $180,000
- Advertising (fixed) $100,000
- Charge for office space (fixed) $2,000
- Office supplies & forms (variable) $2,400
- TOTAL $784,400

After he submitted his budget, the president of Office Furniture Solutions reviewed it and recommended that advertising be increased to $120,000. Further, she wanted Matthew to assume a sales level of $13,000,000. This 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 $2,000 square 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

Prepare a revised budget consistent with the president's recommendation.

Sales Department
Budgets Costs, 2008
(Assuming Sales of $12M) Increased sales to $13M

Salaries (fixed) $500,000 $500,000
Commissions (variable) $180,000 $180,000
Advertising (fixed) $100,000 $120,000
Charge for office space (fixed) $2,000 $2,000
Office supplies & forms (variable) $2,400 $2,400
TOTAL $784,400 $804,400

Reference no: EM13598690

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