PROBLEM 10 A department of Company X attains sales of $ 6,00,000 at 80% of its normal Capacity and its expenses are given below: Administration Costs (Fixed) Selling Costs Office Salaries 8 per cent 90,000 Salaries of sales General Expenses 2 per cent Travelling Expenses 2 per cent of sales of sales Depreciation 7,500 Sales Office 1 per cent of sales 1 per cent Rates and Taxes 8,750 General Expenses of sales Distribution Costs: Wages (fixed) Rent 15,000 1 per cent of sales 4 per cent of sales Other expenses Draw up flexible administration, selling and distribution costs budget, operating at 90 per cent, 100 per cent and 110 per cent of normal Capacity