Estimating flexible selling expense budget and computing variances. Fuller Products estimates that it will incur the following selling expenses next period:

a. Derive the cost equation (y = a + bx) for selling expenses. (Hint: y = a +
bx + cy.)

b. Assume that Fuller sells 50,000 units during the period at an average price of $6 per unit. The company had budgeted sales for the period to be: volume, 65.000 units; price, $5.50. Calculate the sales price and volume variance.

c. The actual selling expenses incurred during the period were $80,000 fixed and $30,000 variable. Prepare a profit variance analysis for sales revenue and selling expenses.

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Salaries (fixed). Commissions (0.05 of sales revenue) Travel (0.03 of sales revenue). Advertising (fixed).... Sales Office Costs ($4.000 plus $0.05 per unit sold). Shipping Cost ($0.10 per unit sold)... Total Selling Expenses.... $ 20,000 17,875 10,725 50.000 7,250 6,500 $112,350