You are the managerial accountant at Reliable Company. You have been assigned to support the marketing department and manage its master budget. The marketing department is responsible for the following:
• Managing the firm's marketing
• Hiring subcontractors
• Selling the consulting expertise to smaller outside firms
The department's expenses are as follows:
• Salaries and benefits of $48,000/month
• Web site operations of $21,000/ month
• Online advertising expenses of $15,000/month
• Miscellaneous expenses of $3,500/month
The sales forecast for its consulting services are as follows:
• April: $190,000
• May: $200,000
• June: $205,000
The department pays a sales commission of 5%, and this is paid in the following month. Subcontractor expenses are estimated at 45% of sales and are paid the month after they are billed. Consulting fees are collected 20% in the month of sale, 70% in the following month, and 10% in the second month following sale.
Refer to the attached schedules.
Develop a master budget for the marketing department.
This task includes the following:
• Completing the attached schedules for a master budget for the marketing department
• Supporting schedules for cash disbursements and collections
Analyze additional needs and resources based on those budgets. Make recommendations based on those budgets.
Respond to the following for this assignment:
• Develop the marketing department's master budget.
• Prepare a schedule of expected cash collections.
• Make recommendations based on those budgets.
Using the schedule template provided, complete the marketing department’s master budget and schedule of expected cash collections. In a 4-page report, provide your recommendations to support the marketing master budget. Submit both documents to complete the assignment. Please use APA formatting requirements for the word document.
Schedule:
Budget Data:
Reliable Company Marketing Department Master Budget
Data April May June
Budgeted consulting revenues $ 190,000 $ 200,000 $ 205,000
Less: Sales commissions (5% of sales) $ 9,500 $ 10,000 $ 10,250
Less: Cost of sales (45% of sales) $ 85,500 $ 90,000 $ 92,250
Net consulting revenues $ 95,000 $ 100,000 $ 102,500
Accounts Receivable Collections
Month of sale 20%
Month following sale 70%
Second month following sale 10%
Monthly Budgeted Expenses
Salaries and benefits $ 48,000
Web site operations $ 21,000
Online advertising expenses $ 15,000
Other misc. expenses $ 3,500
Accounts Payable Payments
Month of sale 40%
Month following sale 60%
Accounts Payable
Online advertising expenses $ 15,000
ANSWER WILL BE SENT BY EMAIL.
