Question
Fallon Company uses flexible budgets to control its selling expenses. Monthly sales are expected to range from $174,300 to $212,400. Variable costs and their percentage
Fallon Company uses flexible budgets to control its selling expenses. Monthly sales are expected to range from $174,300 to $212,400. Variable costs and their percentage relationship to sales are sales commissions 7%, advertising 4%, traveling 3%, and delivery 2%. Fixed selling expenses will consist of sales salaries $35,200, depreciation on delivery equipment $6,600, and insurance on delivery equipment $1,700. Prepare a monthly flexible budget for each $12,700 increment of sales within the relevant range for the year ending December 31, 2017. (List variable costs before fixed costs.)
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