Question

Exercise 22-5 Fallon Company uses flexible budgets to control its selling expenses. Monthly sales are expected to range from $168,200 to $201,800. Variable costs and their percentage relationship to sales are sales commissions 7%, advertising 6%, traveling 3%, and delivery 2%. Fixed selling expenses will consist of sales salaries $35,300, depreciation on delivery equipment $6,800, and insurance on delivery equipment $1,400. Prepare a monthly flexible budget for each $11,200 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
		$		$		$		$
		$		$		$		$
		$		$		$		$

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Answer 1

Answer-

FALLON COMPANY
Monthly Selling Expense Flexible Budget
For the Year 2017
Particulars	Amount	Amount	Amount	Amount
	$	$	$
Sales	168200	179400	190600	201800
Variable Expesnes:- % of sales
Sales commissions 7%	11774	12558	13342	14126
Advertising 6%	10092	10764	11436	12108
Travel 3%	5046	5382	5718	6054
Delivery 2%	3364	3588	3812	4036
Total Variable expenses (a)	30276	32292	34308	36324
Fixed Expenses:-
Sales salaries	35300	35300	35300	35300
Depreciation	6800	6800	6800	6800
Insurance	1400	1400	1400	1400
Total Fixed expenses (b)	43500	43500	43500	43500
Total Expesnses (c=a+b)	73776	75792	77808	79824