Fallon Company uses flexible budgets to control its selling expenses. Monthly sales are expected to range from $172,100 to $205,400. Variable costs and their percentage relationship to sales are sales commissions 6%, advertising 6%, traveling 3%, and delivery 2%. Fixed selling expenses will consist of sales salaries $35,400, depreciation on delivery equipment $6,500, and insurance on delivery equipment $1,200. Prepare a monthly flexible budget for each $11,100 increment of sales within the relevant range for the year ending December 31, 2017. (List variable costs before fixed costs.)
Fallon Company uses flexible budgets to control its selling expenses. Monthly sales are expected to range from $172,100 to $205,400. Variable costs and their percentage relationship to sales are sales commissions 6%, advertising 6%, traveling 3%, and delivery 2%. Fixed selling expenses will consist of sales salaries $35,400, depreciation on delivery equipment $6,500, and insurance on delivery equipment $1,200. Prepare a monthly flexible budget for each $11,100 increment of sales within the relevant range for the year ending December 31, 2017. (List variable costs before fixed costs.)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter8: Budgeting For Planning And Control
Section: Chapter Questions
Problem 34E: A companys sales for the coming months are as follows: About 20 percent of sales are cash sales, and...
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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Transcribed Image Text:Fallon Company uses flexible budgets to control its selling expenses. Monthly sales are expected to range from $172,100 to $205,400. Variable costs and their percentage relationship to sales are
sales commissions 6%, advertising 6%, traveling 3%, and delivery 2%. Fixed selling expenses will consist of sales salaries $35,400, depreciation on delivery equipment $6,500, and insurance on
delivery equipment $1,200.
Prepare a monthly flexible budget for each $11,100 increment of sales within the relevant range for the year ending December 31, 2017. (List variable costs before fixed costs.)
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