The actual selling expenses incurred in March 2017 by Fallon Company are as follows. Variable Expenses Fixed Expenses Sales commissions $10,766 Sales salaries $34,700 Advertising 11,682 Depreciation 7,300 Travel 6,624 Insurance 2,000 Delivery 3,372 (a) Prepare a flexible budget performance report for March, assuming that March sales were $165,600. Variable costs and their percentage relationship to sales are sales commissions 6%, advertising 7%, traveling 4%, and delivery 2%. Fixed selling expenses will consist of sales salaries $34,700, Depreciation on delivery equipment $7,300, and insurance on delivery equipment $2,000. (List variable costs before fixed costs.)

FALLON COMPANY Selling Expense Flexible Budget Report For the Month Ended March 31, 2017 Difference Favorable Unfavorable Neither Favorable nor Unfavorable Budget Actual Sales Variable Costs + Sales Commissions