1. 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	18% of sales
   Miscellaneous administrative expense	$5,000 per month plus 12% of sales
   Office salaries expense	$29,000 per month
   Customer support expenses	$14,000 per month plus 20% of sales
   Research and development expense	$32,000 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:
   	$	$	$
   Total variable cost	$	$	$
   Fixed cost:
   	$	$	$
   Total fixed cost	$	$	$
   Total selling and administrative expenses	$	$	$

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