Trusler Company uses flexible budgets to control its selling expenses. Monthly s

Question

Trusler Company uses flexible budgets to control its selling expenses. Monthly sales are expected to range from $170,000 to $200,000. Variable costs and their percentage relationship to sales are: Sales Commissions 5%, Advertising 4%, Traveling 3%, and Delivery 2%. Fixed selling expenses will consist of Sales Salaries $34,000, Depreciation on Delivery Equipment $7,000, and Insurance on Delivery Equipment $1,000.

Instructions

Complete the monthly flexible budget for each $10,000 increment of sales within the relevant range for the year ending December 31, 2012

TRUSLER COMPANY

Monthly Flexible Selling Expense Budget

For the Year 2012

Activity Level

Sales ___  ___  ___  ___

Variable Costs

Sales Commision ___  ___  ___  ___

Advertising ___  ___  ___  ___

Traveling ___  ___  ___  ___

Delivery ___  ___  ___  ___

Total Variable Expenses ___  ___  ___  ___

Fixed Costs

Depreciation ___  ___  ___  ___

Insurance ___  ___  ___  ___

Total fixed expenses ___  ___  ___  ___

Explanation / Answer

Sales : 170000 180000 190000 200000

Variable costs   

Sales commissions 8500 9000 9500 10000

Advertising 6800 7200 7600 8000

Travelling 5100 5400 5700 6000

Delivary 3400 3600 3800 4000

Total variable exp : 23800 25200 26600 28000

Depreciation 7000 7412 7823 8234

salaries 34000 36000 38000 40000

insurance 1000 1058.82 1117.64 1176.46

Fixed Costs 42000 44470.82 46940.64 49410.6

cheers :)

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