The actual selling expenses incurred in March 2017 by Fallon Company are as foll

Question

The actual selling expenses incurred in March 2017 by Fallon Company are as follows.

Variable Expenses

Fixed Expenses

(a) Prepare a flexible budget performance report for March, assuming that March sales were $173,100. Variable costs and their percentage relationship to sales are sales commissions 8%, advertising 6%, traveling 4%, and delivery 2%. Fixed selling expenses will consist of sales salaries $34,600, Depreciation on delivery equipment $6,600, and insurance on delivery equipment $2,000. (List variable costs before fixed costs.)

Variable Expenses

Fixed Expenses

Sales commissions $14,688 Sales salaries $34,600 Advertising 10,476 Depreciation 6,600 Travel 6,924 Insurance 2,000 Delivery 3,552

Explanation / Answer

Flexible budget performance report for March

Sales $173100 Less:Variable Cost Sales commisssions $13848 (8% of 173100) Advertising $10386 (6% of 173100) Travel $6924 (4% of 173100) Delivery $3462 (2% of 173100) Less: Fixed cost Sales salaries $34600 Depreciation $6600 Insurance $2000 Net Income $95280

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