Timothy Donaghy has developed a unique formula for growing hair.

Timothy Donaghy has developed a unique formula for growing hair. His proprietary lotion, used commonly for 45 days, will develop hair in bald spots (with various levels of success).
Timothy Donaghy has developed a unique formula for growing hair. His proprietary lotion, used commonly for 45 days, will develop hair in bald spots (with various levels of success). Timothy calls his lotion Hair-Once more and is promoting it through the phone and Web. His main type of advertising and marketing is thru 15-minute infomercials and Web promoting. Timothy sells every 16- ounce bottle of Hair-Once more for $15 and pays a fee of three p.c of gross sales to phone operators who subject the 1-800 cellphone calls from potential clients. Fastened advertising and marketing bills for every quarter of the approaching yr embody:

As well as, early subsequent yr Timothy intends to movie and present infomercials on tv. He expects the associated fee to be $10,000 in quarters 1 and a couple of, and that the associated fee will rise to $25,000 in every of quarters three and four. Timothy expects the next unit gross sales of Hair-Once more:

Required:

1. Assemble a advertising and marketing expense price range for Hair-Once more for the approaching yr. Present complete quantities by quarter and in complete for the yr.

2. What if the price of Web adverts rises to $15,000 in Quarters 2 by way of four? How would that have an effect on variable advertising and marketing expense? Fastened advertising and marketing expense? Complete advertising and marketing expense?