Timothy Donaghy has developed a unique formula for growing hair. His proprietary lotion, used usually 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 usually 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 by way of the phone and Web. His main type of advertising 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 prospects. Mounted advertising bills for every quarter of the approaching yr embrace:
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As well as, early subsequent yr Timothy intends to movie and present infomercials on tv. He expects the fee to be $10,000 in quarters 1 and a couple of, and that the 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:
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1. Assemble a advertising expense funds for Hair-Once more for the approaching yr. Present whole quantities by quarter and in whole for the yr.
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2. What if the price of Web adverts rises to $15,000 in Quarters 2 by means of four? How would that have an effect on variable advertising expense? Mounted advertising expense? Complete advertising expense?
