Question

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

(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.) NOVAK COMPANY Selling Expense Flexible Budget Report For the Month Ended March 31, 2017March 31, 2017For the Year Ended March 31, 2017 Difference Budget Actual Favorable/Unfavorable Neither Favorable nor Unfavorable AdvertisingDepreciationDeliveryFixed CostsInsuranceSalesSales CommissionsSales SalariesTotal CostsTotal Fixed CostsTotal Variable CostsTravelVariable Costs $ $ AdvertisingDepreciationDeliveryFixed CostsInsuranceSalesSales CommissionsSales SalariesTotal CostsTotal Fixed CostsTotal Variable CostsTravelVariable Costs AdvertisingDepreciationDeliveryFixed CostsInsuranceSalesSales CommissionsSales SalariesTotal CostsTotal Fixed CostsTotal Variable CostsTravelVariable Costs $ $ $ FavorableUnfavorableNeither Favorable nor Unfavorable AdvertisingDepreciationDeliveryFixed CostsInsuranceSalesSales CommissionsSales SalariesTotal CostsTotal Fixed CostsTotal Variable CostsTravelVariable Costs FavorableUnfavorableNeither Favorable nor Unfavorable AdvertisingDepreciationDeliveryFixed CostsInsuranceSalesSales CommissionsSales SalariesTotal CostsTotal Fixed CostsTotal Variable CostsTravelVariable Costs FavorableUnfavorableNeither Favorable nor Unfavorable AdvertisingDepreciationDeliveryFixed CostsInsuranceSalesSales CommissionsSales SalariesTotal CostsTotal Fixed CostsTotal Variable CostsTravelVariable Costs FavorableUnfavorableNeither Favorable nor Unfavorable AdvertisingDepreciationDeliveryFixed CostsInsuranceSalesSales CommissionsSales SalariesTotal CostsTotal Fixed CostsTotal Variable CostsTravelVariable Costs FavorableUnfavorableNeither Favorable nor Unfavorable AdvertisingDepreciationDeliveryFixed CostsInsuranceSalesSales CommissionsSales SalariesTotal CostsTotal Fixed CostsTotal Variable CostsTravelVariable Costs AdvertisingDepreciationDeliveryFixed CostsInsuranceSalesSales CommissionsSales SalariesTotal CostsTotal Fixed CostsTotal Variable CostsTravelVariable Costs FavorableUnfavorableNeither Favorable nor Unfavorable AdvertisingDepreciationDeliveryFixed CostsInsuranceSalesSales CommissionsSales SalariesTotal CostsTotal Fixed CostsTotal Variable CostsTravelVariable Costs FavorableUnfavorableNeither Favorable nor Unfavorable AdvertisingDepreciationDeliveryFixed CostsInsuranceSalesSales CommissionsSales SalariesTotal CostsTotal Fixed CostsTotal Variable CostsTravelVariable Costs FavorableUnfavorableNeither Favorable nor Unfavorable AdvertisingDepreciationDeliveryFixed CostsInsuranceSalesSales CommissionsSales SalariesTotal CostsTotal Fixed CostsTotal Variable CostsTravelVariable Costs FavorableUnfavorableNeither Favorable nor Unfavorable AdvertisingDepreciationDeliveryFixed CostsInsuranceSalesSales CommissionsSales SalariesTotal CostsTotal Fixed CostsTotal Variable CostsTravelVariable Costs $ $ $ FavorableUnfavorableNeither Favorable nor Unfavorable Click if you would like to Show Work for this question: Open Show Work

Answer 1

NOVAK COMPANY
Selling Expense Flexible Budget Report
For the Month Ended March 31, 2017
	Budget	Actual	Difference
Sales	173100	173100
Variable costs:
Sales commissions	13848	14688	840	Unfavorable
Advertising	10386	10476	90	Unfavorable
Travel	6924	6924	0	Neither Favorable nor Unfavorable
Delivery	3462	3552	90	Unfavorable
Total variable costs	34620	35640	1020	Unfavorable
Fixed costs:
Sales salaries	34600	34600	0	Neither Favorable nor Unfavorable
Depreciation	6600	6600	0	Neither Favorable nor Unfavorable
Insurance	2000	2000	0	Neither Favorable nor Unfavorable
Total fixed costs	43200	43200	0	Neither Favorable nor Unfavorable
Total costs	77820	78840	1020	Unfavorable