Question

FALLON COMPANY Monthly Selling Expense Flexible Budget For the Year 2017 Activity Level Sales Variable Expenses Sales Commissions Advertising T Traveling Delivery Total Variable Expenses Fixed Expenses T Sales Salaries T Depreciation T Insurance Total Fixed Expenses Total Expenses X

Fallon Company uses flexible budgets to control its selling expenses. Monthly sales are expected to range from $174,100 to $209,200. Variable costs and their percentage relationship to sales are sales commissions 6%, advertising 4%, traveling 4%, and delivery 1%. Fixed selling expenses will consist of sales salaries $35,100, depreciation on delivery equipment $7,500, and insurance on delivery equipment $1,800.

Prepare a monthly flexible budget for each $11,700 increment of sales within the relevant range for the year ending December 31, 2017. (List variable costs before fixed costs.)

Answer 1

Monthly Selling Expense Flexible Budget
For the Year 2017
Activity level
Sales	174100	185800	197500	209200
Variable expenses
Sales commissions	10446	11148	11850	12552
Advertising	6964	7432	7900	8368
Traveling	6964	7432	7900	8368
Delivery	1741	1858	1975	2092
Total variable expenses	26115	27870	29625	31380
Fixed expenses
Sales salaries	35100	35100	35100	35100
Depreciation	7500	7500	7500	7500
Insurance	1800	1800	1800	1800
Total fixed expenses	44400	44400	44400	44400
Total expenses	70515	72270	74025	75780