Budgeting

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.