Question

Fallon Company uses flexible budgets to control its selling expenses. Monthly sales are expected to range from $172,800 to $215,400. Variable costs and their percentage relationship to sales are sales commissions 7%, advertising 4%, travel 4%, and delivery 1%. Fixed selling expenses will consist of sales salaries $35,500, depreciation on delivery equipment $7.500, and insurance on delivery equipment $1,100. Prepare a monthly selling expense flexible budget for each $14,200 increment of sales within the relevant range for the year ending December 31, 2020. (List variable costs before fixed costs.) FALLON COMPANY Monthly Selling Expense Flexible Budget For the Year 2020 Activity Level Sales 172800 215400 Variable Expenses Sales Commissions Advertising Travel Delivery Total Variable Expenses Fixed Expenses Sales Salaries Depreciation Insurance Total Fixed Expenses Total Expenses

Answer 1

Monthly Selling Expense Flexible Budget
For the Year 2020
Activity level
Sales Revenue	172800	187000	201200	215400
Variable expenses
Sales commissions	12096	13090	14084	15078
Advertising	6912	7480	8048	8616
Traveling	6912	7480	8048	8616
Delivery	1728	1870	2012	2154
Total variable expenses	27648	29920	32192	34464
Fixed expenses
Sales salaries	35500	35500	35500	35500
Depreciation	7500	7500	7500	7500
Insurance	1100	1100	1100	1100
Total fixed expenses	44100	44100	44100	44100
Total expenses	71748	74020	76292	78564