Exercise 22-6 Variable Expenses Fixed Expenses Prepare a flexible budget perform
ID: 2492013 • Letter: E
Question
Exercise 22-6
Variable Expenses
Fixed Expenses
Prepare a flexible budget performance report for March, assuming that March sales were $165,200. Variable costs and their percentage relationship to sales are sales commissions 7%, advertising 6%, traveling 4%, and delivery 2%. Fixed selling expenses will consist of sales salaries $35,156, depreciation on delivery equipment $6,792, and insurance on delivery equipment $1,242. (List variable costs before fixed costs.)
DEWITT COMPANY
Selling Expense Flexible Budget Report
For the Month Ended March 31, 2014
Difference
Budget
Actual
Favorable (F)
Unfavorable (U)
Neither Favorable
nor Unfavorable (N)
LINK TO TEXT
DEWITT COMPANY
Selling Expense Flexible Budget Report
For the Month Ended March 31, 2014
Difference
Budget
Actual
Favorable (F)
Unfavorable (U)
Neither Favorable
nor Unfavorable (N)
Exercise 22-6
The actual selling expenses incurred in March 2014 by DeWitt Company are as follows.Variable Expenses
Fixed Expenses
Sales commissions $12,368 Sales salaries $35,156 Advertising 9,985 Depreciation 6,792 Travel 6,608 Insurance 1,242 Delivery 3,380Explanation / Answer
DEWITT COMPANY Monthly Selling Expense Flexible Budget For the Year 2014 Activity level Budgeted Sales Revenue Actual $165,200 Diffrance F/U Variable expenses Sales commissions (7%) $ 12,368 $ 11,564 $ (804) U Advertising (6%) 9,985 9,912 $ (73) U Traveling (4%) 6,608 6,608 $ - Delivery (2%) 3,380 3,304 $ (76) U Total variable expenses (15%) 32,341 31,388 $ (953) U Fixed expenses Sales salaries 35,156 35,156 $ - Depreciation 6,792 6,792 $ - Insurance 1,242 1,242 $ - Total fixed expenses 43,190 43,190 $ - Total expenses $ 75,531 $ 74,578 $ (953) U DEWITT COMPANY Monthly Selling Expense Flexible Budget For the Year 2014 Activity level Budgeted Sales Revenue Actual $172,900 Diffrance F/U Variable expenses Sales commissions (7%) $ 12,368 $ 12,103 $ (265) U Advertising (6%) 9,985 10,374 $ 389 F Traveling (4%) 6,608 6,916 $ 308 Delivery (2%) 3,380 3,458 $ 78 F Total variable expenses (15%) 32,341 32,851 $ 510 F Fixed expenses Sales salaries 35,156 35,156 $ - Depreciation 6,792 6,792 $ - Insurance 1,242 1,242 $ - Total fixed expenses 43,190 43,190 $ - Total expenses Value Value $ 510 F
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