Exercise 22-5 advertising 4%, traveling 4%, and Fallon Company uses flexible bud

Question

Exercise 22-5 advertising 4%, traveling 4%, and Fallon Company uses flexible budgets to control its selling expenses. Monthly sales are expected to range rom 173,900 to $210,200 variable oosts and their percentage relationship to sales are sales commissions 79 delivery 2%. Fixed seling expenses will consist of sales salaries $35,500, depreciation on delivery equipment $7,300, and insurance on delivery equipment $2,000. Prepare a monthly flexible budget for each12,100 increment of sales within the relevant range for the year ending December 31, 2017, (List variable costs before fixed costs.) FALLON COMPANY Monthly Selling Expense Flexible Budget For the Year 2017

Explanation / Answer

Monthly Selling Expense Flexible Budget Activity level Sales 173900 186000 198100 210200 Variable expenses: Sales commissions 12173 13020 13867 14714 Advertising 6956 7440 7924 8408 Traveling 6956 7440 7924 8408 Delivery 3478 3720 3962 4204 Total variable expenses 29563 31620 33677 35734 Fixed expenses: Sales salaries 35500 35500 35500 35500 Depreciation 730 730 730 730 Insurance 2000 2000 2000 2000 Total fixed expenses 38230 38230 38230 38230 Total costs 67793 69850 71907 73964

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