Example of Advertizing Expense - Note 3
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NOTE 3 - ADVERTISING EXPENSE
The Company's advertising budget has been established as follows:
| YEAR 1 | YEAR 2 | YEAR 3 | |
| Newspaper Advertising | $ 90,000 | $105,000 | $120,000 |
| Magazine Advertising | $ 30,000 | $ 35,000 | $ 40,000 |
| Radio Promotions | $ 10,000 | $ 10,000 | $ 10,000 |
| Total Advertising Budget | $130,000 | $150,000 | $170,000 |
| Advertising Budget as a Percentage of Sales | 22.45% | 22.47% | 21.67% |
In year one, J&B plans to spend $5,000 during the two month testing phase (April and May). Upon completing the testing phase, the company has budgeted $12,000 each month for the remaining ten months. As a result, the company plans to spend a total of $130,000 in advertising during the first year of operation. In year two and three the company has budgeted $150,000 and $170,000 for its advertising campaign. These funds will be disbursed on an equal bases over a twelve month period.