Chapter 07 Homework (Application) Flexible Budget for Selling and Administrative Expenses for a Service Company Cloud Productivity Inc. uses flexible budgets that are based on the following data: Sales commissions 14% of sales Advertising expense 20% of sales Miscellaneous administrative expense $6,000 per month plus 125 of sales Office salaries expense $30,000 per month Customer support expenses $12,000 per month plus 20% of sales Research and development expense $31,000 per month Prepare a flexible selling and administrative expenses budget for March for sales volumes of $400,000, $500,000, and $600,000. (Use Exhibit 5 as a model.) Cloud Productivity Inc. Flexible Selling and Administrative Expenses Budget For the Month Ending March 31 Total sales $400000 500000 600000 Variable cost: Sales commissions Advertising expense Miscellaneous administrative expense Customer support expenses Total variable cost Fed cost Miscellaneous administrative expense Office salaries expense Customer support expenses Research and development expense Totalfixed cost Total selling and administrative expenses For each level of sales activity, show all variable expenses and all fixed expenses. Learning Objective 2. Learning Objective 4