Exercise 22-5

Fallon Company uses flexible budgets to control its selling expenses. Monthly sales are expected to range from $167,300to $209,300. Variable costs and their percentage relationship to sales are sales commissions7%, advertising6%, traveling4%, and delivery1%. Fixed selling expenses will consist of sales salaries $34,900, depreciation on delivery equipment $7,100, and insurance on delivery equipment $1,900.

Make a monthly flexible budget for each $14,000increment 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