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A company is formulating its marketing expense budget for the last quarter of the year. Sales in units for the third quarter amounted to 4,000; sales volume for the fourth quarter is expected to increase by 10%. Variable marketing expense per unit sold amounts to approximately $0.05, paid in cash in the month of sale. Fixed marketing expense per month amounts to $10,000 of salaries, $5,000 of depreciation (delivery trucks), and $2,000 of insurance (paid monthly). Required:
Problem a. What is the total budgeted marketing expense for the fourth quarter of the year?
Problem b. What is the estimated cash payment for marketing expenses for the fourth quarter?
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