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652 viewsOctober 24, 2016

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Darshita 6.14K October 24, 2016 0 Comments

Prepare a flexible budget performance report for March, assuming that March sales were $165,200. Variable costs and their percentage relationship to sales are sales commissions 7%, advertising 6%, traveling 4%, and delivery 2%. Fixed selling expenses will consist of sales salaries $35,156, depreciation on delivery equipment $6,792, and insurance on delivery equipment $1,242.(List variable costs before fixed costs.)

DEWITT COMPANY
Selling Expense Flexible Budget Report
For the Month Ended March 31, 2014

Exercise 22-6

The actual selling expenses incurred in March 2014 by DeWitt Company are as follows.

Variable Expenses		Fixed Expenses
Sales commissions	$12,368	Sales salaries	$35,156
Advertising	9,985	Depreciation	6,792
Travel	6,608	Insurance	1,242
Delivery	3,380

1 Answer

score 0 · Answer 1 · 2016-10-24T11:19:32+00:00

DEWITT COMPANY
Monthly Selling Expense Flexible Budget
For the Year 2014
Activity level		Budgeted
Sales Revenue	Actual	$165,200	Diffrance	F/U
Variable expenses
Sales commissions (7%)	$ 12,368	$ 11,564	$ (804)	U
Advertising (6%)	9,985	9,912	$ (73)	U
Traveling (4%)	6,608	6,608	$ –
Delivery (2%)	3,380	3,304	$ (76)	U
Total variable expenses (15%)	32,341	31,388	$ (953)	U
Fixed expenses
Sales salaries	35,156	35,156	$ –
Depreciation	6,792	6,792	$ –
Insurance	1,242	1,242	$ –
Total fixed expenses	43,190	43,190	$ –

Total expenses	$ 75,531	$ 74,578	$ (953)	U

DEWITT COMPANY
Monthly Selling Expense Flexible Budget
For the Year 2014
Activity level		Budgeted
Sales Revenue	Actual	$172,900	Diffrance	F/U
Variable expenses
Sales commissions (7%)	$ 12,368	$ 12,103	$ (265)	U
Advertising (6%)	9,985	10,374	$ 389	F
Traveling (4%)	6,608	6,916	$ 308
Delivery (2%)	3,380	3,458	$ 78	F
Total variable expenses (15%)	32,341	32,851	$ 510	F
Fixed expenses
Sales salaries	35,156	35,156	$ –
Depreciation	6,792	6,792	$ –
Insurance	1,242	1,242	$ –
Total fixed expenses	43,190	43,190	$ –

Total expenses	Value	Value	$ 510	F