Seattle Products estimates that it will incur the following selling expenses next period:

Salaries (fixed)	$20,000
Commissions (0.05 of sales revenue)	$17,875
Travel (0.03 of sales revenue)	$10,725
Advertising (fixed)	$50,000
Sales Office Costs ($4,000 plus $0.05 per unit sold)	$7,250
Shipping Costs ($0.10 per unit sold)	$6,500
Total Selling Expenses	$112,350

a. Derive the cost equation for selling expenses. (Hint: y = a + bx + cy)

b. Assume that Seattle sells 50,000 units during the period. Budgeted sales totaled 65,000 units at a budgeted sales price of $5.50 per unit. Prepare a variance report to show the difference between the master budget and the flexible budget.