# Advertising Budget Worksheet

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```					Advertising Budget Worksheet                   Name: _______________________

1. Write the following decimals as percents.

1.37 = _____     0.05 = _____        0.0005 = _____      0.2 = _____

0.007 = _____    1.00 = _____        6.5 = _____         0.0025 = _____

2. Write the following percents as decimals.

0.6% = _____     25% = _____         3.5% = _____        3% = _____

250% = _____     0.15% = _____       0.007% = _____      7.35% = _____

3. Finding what percent one number is of another.

   What percent of 75 is 40?     _____

   What percent of 320 is 85?    _____

   35 is what percent of 98?     _____

   17 is what percent of 67?     _____

4. Finding the original number when a percent of it is known.

   15% of what number is 30?     _____

   50% of what number is 125? _____

   5% of what number is 25?      _____

   98% of what number is 78?     _____

5. Percent change

   The price of a car changed from \$7500 to \$9800. What is the percent
increase? _____

   The price of a computer changed from \$1500 to \$850. What is the
percent decrease?      _____

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6. Arithmetic Mean or Average

   Find the mean of 113, 78, 145, 98, 220, and 76     _____

   Find the average cost for the following sweaters \$25, \$35, \$55, \$27,
\$89, \$48, \$133, and \$79.       _____

7. Advertising budgeting methods

   Last year’s sales were \$11,600,000 and are projected to increase by
4% for next year. Last year’s expenses were 41% of last year’s sales
and are projected to decrease by 2% for next year. Last year the
business earned a profit of \$4,117,600. Profit is expected to increase
by 3% over last year’s figures. Plug in last years figures to see how
much the company spent on advertising last year.

Sales (for the year)
Expenses

Profit
Amount spent on advertising

   Based on the last year’s figures and the projected changes in sales,
expenses and profit, calculated forecasted sales, expenses and profits
for the upcoming year. Calculate the amount left to spend on

Forecasted sales
Forecasted expenses

Forecasted profit expectation
Amount left to spend on advertising

8. A business has yearly sales of \$1,800,000. The industry average is to spend
6 percent of gross sales on advertising. The company has expenses of
\$1,200,000 and wants to maintain a profit margin of 30 percent of sales.

a. If this business uses the affordable budget method, what would it
establish as its advertising budget?            _____

b. Assume the business wants to spend 3.5% of its sales for
advertising. If the business uses the percent of sales method, what
would it establish as its advertising budget?   _____

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9. J & J Supply’s promotional budget is based on 4% of last year’s sales.
Determine this year’s budget based on last year’s sales of \$1,000,000. _____

10. The Kriss Camera Shop’s promotional budget is based on 3% of anticipated
sales for the coming year. Determine this year’s promotional budget based
on anticipated sales of \$700,450. _____

11. Using the advertising based on objectives approach, calculate the total of
estimated sales, the total planned to be spent on advertising, and the
percentage of sales for each of the special advertising events and for the total
sales for the following business.

Month          Sales Goal      Sales Event       Advertising    % of Sales
Cost
April          \$12,500         Spring Fling      \$750.00
Sale
June           \$112,700        Summer            \$6,198.50
Clearance
Sale
Nov-Dec        \$246,750        Holiday           \$9,870.00
Bazaar Sale
Totals                         xxxxxxxx

On a piece of graph paper graph the sales goals and percent of sales for the
above situation.

12. Smith’s Department Store needs to decide which advertising budgeting
method to use. The following information is needed to calculate Smith’s
advertising budget using all three methods.

 Affordable Budget Method
Last year’s sales were \$9,815,000 and are projected to increase by 4.5%
for next year. Last year’s expenses were 41% of last year’s sales and are
projected to decrease by 1.5% for next year. Last year the business
earned a profit of \$4,587,600. Profit is expected to increase by 2% over
last year’s figures. Based on the last year’s figures and the projected
changes in sales, expenses and profit, calculated forecasted sales,
expenses and profits for the upcoming year. Calculate the amount left to
Forecasted sales
Forecasted expenses

Forecasted profit expectation
Amount left to spend on advertising

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 Percentage of Sales Method
The following are the percentage of sales figures other department stores
in the country use to determine advertising budgets. Calculate the mean
or average for the industry: 5%, 7.5%, 4%, 11%, 9.75%, 10%, and 8%.
The average or mean for the industry is _____

Based on the industry mean/average, and using the forecasted sales for
Smith’s in the affordable budget method from above, what is the amount
Smith’s should use for its advertising budget? _____

 Budget Based on Objectives Method
Below are the activities on which Smith’s Department Store will base its
budget for the entire year.

Month            Sales Goal       Sales Event     Advertising      % of Sales
Cost
January          \$256,417         Winter          \$8,975
Clearance
February         \$299,153         Valentines &    \$14,958
Presidents
Days
March-April      \$598,306         Easter,         \$50,856
Spring Fling
May-June         \$683,778         Summer          \$30,770
Days
July             \$854,723         July 4th and    \$66,241
Clearance
August           \$923,850         Back to         \$64,670
School
September –      \$1,500,730       Fall Fashions   \$127,562
October
November-        \$3,750,000       Winter Sale     \$337,500
December
December         \$1,389,718       General         \$90,332
Christmas
Sale
Totals                            XXXXX

Graph the total advertising costs and percent of sales figures for each method.
Write a brief statement of the differences you notice between all three methods.

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 views: 193 posted: 11/27/2008 language: English pages: 4