Exercise 24-6

The actual selling expenses incurred in March 2017 by Fallon Company are as follows.

Variable Expenses				Fixed Expenses
Sales commissions		$11,000		Sales salaries		$35,000
Advertising		6,900		Depreciation		7,000
Travel		5,100		Insurance		1,000
Delivery		3,450

(a) Prepare a flexible budget performance report for March, assuming that March sales were $170,000. Variable costs and their percentage relationship to sales are sales commissions 6%, advertising 4%, traveling 3%, and delivery 2%. Fixed selling expenses will consist of sales salaries $35,000, Depreciation on delivery equipment $7,000, and insurance on delivery equipment $1,000. (List variable costs before fixed costs.)

Exercise 24-6 The actual selling expenses incurred in March 2017 by Fallon Company are as follows. Variable Expenses Fixed Expenses Sales commissions $11,000 Sales salaries $35,000 Advertising 6,900 Depreciation 7,000 Travel 5,100 Insurance 1,000 Delivery 3,450 (a) Prepare a flexible budget performance report for March, assuming that March sales were $170,000. Variable costs and their percentage relationship to sales are sales commissions 6%, advertising 4%, traveling 3%, and delivery 2%. Fixed selling expenses will consist of sales salaries $35,000, Depreciation on delivery equipment $7,000, and insurance on delivery equipment $1,000. (List variable costs before fixed costs.) FALLON COMPANY Selling Expense Flexible Budget Report For the Month Ended March 31, 2017 Difference Favorable Unfavorable Neither Favorable nor Unfavorable Budget Actual v V > > > > > V V V V > > > >