Exercise 22-5

DeWittCompany uses flexible budgets to control its selling expenses. Monthly sales are expected to range from $173,400to $213,300. Variable costs and their percentage relationship to sales are sales commissions7%, advertising5%, traveling4%, and delivery1%. Fixed selling expenses will consist of sales salaries $35,372, depreciation on delivery equipment $7,226, and insurance on delivery equipment $1,624.

Prepare a monthly flexible budget for each $13,300increment of sales within the relevant range for the year ending December 31, 2014.(List variable costs before fixed costs.)

DEWITT COMPANY Monthly Selling Expense Flexible Budget For the Year 2014
AdvertisingActivity LevelDepreciationDeliveryFixed ExpensesInsuranceSalesSales CommissionsSales SalariesTotal ExpensesTotal Fixed ExpensesTotal Variable ExpensesTravelingVariable Expenses
AdvertisingActivity LevelDepreciationDeliveryFixed ExpensesInsuranceSalesSales CommissionsSales SalariesTotal ExpensesTotal Fixed ExpensesTotal Variable ExpensesTravelingVariable Expenses	$	$	$	$
AdvertisingActivity LevelDepreciationDeliveryFixed ExpensesInsuranceSalesSales CommissionsSales SalariesTotal ExpensesTotal Fixed ExpensesTotal Variable ExpensesTravelingVariable Expenses
AdvertisingActivity LevelDepreciationDeliveryFixed ExpensesInsuranceSalesSales CommissionsSales SalariesTotal ExpensesTotal Fixed ExpensesTotal Variable ExpensesTravelingVariable Expenses	$	$	$	$
AdvertisingActivity LevelDepreciationDeliveryFixed ExpensesInsuranceSalesSales CommissionsSales SalariesTotal ExpensesTotal Fixed ExpensesTotal Variable ExpensesTravelingVariable Expenses
AdvertisingActivity LevelDepreciationDeliveryFixed ExpensesInsuranceSalesSales CommissionsSales SalariesTotal ExpensesTotal Fixed ExpensesTotal Variable ExpensesTravelingVariable Expenses
AdvertisingActivity LevelDepreciationDeliveryFixed ExpensesInsuranceSalesSales CommissionsSales SalariesTotal ExpensesTotal Fixed ExpensesTotal Variable ExpensesTravelingVariable Expenses
AdvertisingActivity LevelDepreciationDeliveryFixed ExpensesInsuranceSalesSales CommissionsSales SalariesTotal ExpensesTotal Fixed ExpensesTotal Variable ExpensesTravelingVariable Expenses
AdvertisingActivity LevelDepreciationDeliveryFixed ExpensesInsuranceSalesSales CommissionsSales SalariesTotal ExpensesTotal Fixed ExpensesTotal Variable ExpensesTravelingVariable Expenses
AdvertisingActivity LevelDepreciationDeliveryFixed ExpensesInsuranceSalesSales CommissionsSales SalariesTotal ExpensesTotal Fixed ExpensesTotal Variable ExpensesTravelingVariable Expenses
AdvertisingActivity LevelDepreciationDeliveryFixed ExpensesInsuranceSalesSales CommissionsSales SalariesTotal ExpensesTotal Fixed ExpensesTotal Variable ExpensesTravelingVariable Expenses
AdvertisingActivity LevelDepreciationDeliveryFixed ExpensesInsuranceSalesSales CommissionsSales SalariesTotal ExpensesTotal Fixed ExpensesTotal Variable ExpensesTravelingVariable Expenses
AdvertisingActivity LevelDepreciationDeliveryFixed ExpensesInsuranceSalesSales CommissionsSales SalariesTotal ExpensesTotal Fixed ExpensesTotal Variable ExpensesTravelingVariable Expenses
AdvertisingActivity LevelDepreciationDeliveryFixed ExpensesInsuranceSalesSales CommissionsSales SalariesTotal ExpensesTotal Fixed ExpensesTotal Variable ExpensesTravelingVariable Expenses	$	$	$	$

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Exercise 22-2 CredeCompany budgeted selling expenses of $30,317in January, $34,443in February, and $40,724in March. Actual selling expenses were $32,197in January, $33,921in February, and $47,002in March. (a) Prepare a selling expense report that compares budgeted and actual amounts by month and for the year to date.

CREDE COMPANY Selling Expense Report For the Quarter Ending March 31
	By Month	Year-to-Date
Month	Budget	Actual	Difference	Budget	Actual	Difference
January	$	$	$	FUN	$	$	$	FUN
February	$	$	$	FUN	$	$	$	FUN
March	$	$	$	FUN	$	$	$	FUN

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