Question

Fallon Company uses flexible budgets to control its selling expenses. Monthly sales are expected to range from $172,100 to $205,400. Variable costs and their percentage relationship to sales are sales commissions 6%, advertising 6%, travel 3%, and delivery 2%. Fixed selling expenses will consist of sales salaries $35,400, depreciation on delivery equipment $6,500, and insurance on delivery equipment $1,200.

Prepare a monthly selling expense flexible budget for each $11,100 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
AdvertisingActivity LevelDepreciationDeliveryFixed ExpensesInsuranceSalesSales CommissionsSales SalariesTotal ExpensesTotal Fixed ExpensesTotal Variable ExpensesTravelVariable Expenses
AdvertisingActivity LevelDepreciationDeliveryFixed ExpensesInsuranceSalesSales CommissionsSales SalariesTotal ExpensesTotal Fixed ExpensesTotal Variable ExpensesTravelVariable Expenses		$		$		$		$
AdvertisingActivity LevelDepreciationDeliveryFixed ExpensesInsuranceSalesSales CommissionsSales SalariesTotal ExpensesTotal Fixed ExpensesTotal Variable ExpensesTravelVariable Expenses
AdvertisingActivity LevelDepreciationDeliveryFixed ExpensesInsuranceSalesSales CommissionsSales SalariesTotal ExpensesTotal Fixed ExpensesTotal Variable ExpensesTravelVariable Expenses		$		$		$		$
AdvertisingActivity LevelDepreciationDeliveryFixed ExpensesInsuranceSalesSales CommissionsSales SalariesTotal ExpensesTotal Fixed ExpensesTotal Variable ExpensesTravelVariable Expenses
AdvertisingActivity LevelDepreciationDeliveryFixed ExpensesInsuranceSalesSales CommissionsSales SalariesTotal ExpensesTotal Fixed ExpensesTotal Variable ExpensesTravelVariable Expenses
AdvertisingActivity LevelDepreciationDeliveryFixed ExpensesInsuranceSalesSales CommissionsSales SalariesTotal ExpensesTotal Fixed ExpensesTotal Variable ExpensesTravelVariable Expenses
AdvertisingActivity LevelDepreciationDeliveryFixed ExpensesInsuranceSalesSales CommissionsSales SalariesTotal ExpensesTotal Fixed ExpensesTotal Variable ExpensesTravelVariable Expenses
AdvertisingActivity LevelDepreciationDeliveryFixed ExpensesInsuranceSalesSales CommissionsSales SalariesTotal ExpensesTotal Fixed ExpensesTotal Variable ExpensesTravelVariable Expenses
AdvertisingActivity LevelDepreciationDeliveryFixed ExpensesInsuranceSalesSales CommissionsSales SalariesTotal ExpensesTotal Fixed ExpensesTotal Variable ExpensesTravelVariable Expenses
AdvertisingActivity LevelDepreciationDeliveryFixed ExpensesInsuranceSalesSales CommissionsSales SalariesTotal ExpensesTotal Fixed ExpensesTotal Variable ExpensesTravelVariable Expenses
AdvertisingActivity LevelDepreciationDeliveryFixed ExpensesInsuranceSalesSales CommissionsSales SalariesTotal ExpensesTotal Fixed ExpensesTotal Variable ExpensesTravelVariable Expenses
AdvertisingActivity LevelDepreciationDeliveryFixed ExpensesInsuranceSalesSales CommissionsSales SalariesTotal ExpensesTotal Fixed ExpensesTotal Variable ExpensesTravelVariable Expenses
AdvertisingActivity LevelDepreciationDeliveryFixed ExpensesInsuranceSalesSales CommissionsSales SalariesTotal ExpensesTotal Fixed ExpensesTotal Variable ExpensesTravelVariable Expenses		$		$		$		$

Answer 1

Fallon Company Monthly selling Expense Flexible Budget
	Amount	Amount	Amount	Amount
Sales (a)	$172,100	$183,200	$194,300	$205,400
Variable Expense
Sales Commissions (aX6%)	$10,326	$10,992	$11,658	$12,324
Advertising (ax 6%)	$10,326	$10,992	$11,658	$12,324
Traveling (ax 3%)	$5,163	$5,496	$5,829	$6,162
Delivery (aX2%)	$3,442	$3,664	$3,886	$4,108
Total Variable Expense	$29,257	$31,144	$33,031	$34,918
Fixed Expenses
Sales Salaries	$35,400	$35,400	$35,400	$35,400
Depreciation	$6,500	$6,500	$6,500	$6,500
Insurance	$1,200	$1,200	$1,200	$1,200
Total Fixed Expenses	$43,100	$43,100	$43,100	$43,100
Total Expenses	$72,357	$74,244	$76,131	$78,018