Kim Company wants you to prepare a flexible budget for selling and administrative expenses. The general manager and the sales manager have met with all the department heads, who provided the following information regarding selling and administrative expenses: The company presently employs 30 full-time salespersons with a base of P 3,600 each per month plus commissions and 10 full-time salespersons with a salary of P 6,000 each per month plus commissions. In addition, the company employs nine regional sales managers with a salary of P 21,600 per month, none of whom is entitled to any commissions. 

If sales volume exceeds P 80 million per year, the company must hire four more salespersons, each at a salary of P 3,600 per month plus commissions. Sales commissions are either 10% or 5% of the selling price, depending on the product sold. 

Typically, a 10% commission applies on 60% of sales, and a 5% commission applies on the remaining 40% of sales. 

Salespersons’ travel allowances average P 1,500 per month per salesperson (excluding managers). 

Advertising expenses average P 150,000 per month plus 3% of sales. 

Selling supplies expense is estimated at 1% of sales. 

Administrative salaries are P 300,000 per month. 

Other administrative expenses include the following: 

Rent—P 48,000 per month 

Office supplies—2% of sales 

Other administrative expenses (telephone, etc.)—P 12,000 per month.

Required: 

Prepare a flexible budget for selling and administrative expenses for sales volume of P 36 million, P 48 million, and P 60 million per year. Support your answers by showing your computations.