Question

Question 25 View Policies Current Attempt In Progress Cadiz Couses flexible budgets to control its selling expenses. Monthly sales are expected to be from $300,000 to $360,000. Variable costs and their percentage relationships to sales are Sales commissions 5% Advertising Traveling Delivery Fixed selling expenses consist of sales salaries $40,000 and depreciation on delivery equipment $10,000 The actual selling expenses incurred in February, 2019. by Cadiz are as follows: Sales commissions Advertising Traveling Delivery $17200 12.000 23.700 2.400 Fixed selling expenses consist of sales salaries 541,500 and depreciation on delivery equipment $10,000 Prepare a flexible budget performance report assuming that February sales were $330.000 st variable penses before fed expenses.) CADIZ CO. Selling Expense Budget Report (Flexible) For the Month Ended February 28, 2019

Answer 1

Cadiz Co Selling expenses flexible budget For the Month Ended Febraury 28, 2019 Difference Favorable Unfavorable Not Applicable Budget Actual 330,000 $ 330,000 Sales Variable expenses Sales commissions Advertising Traveling Delivery Total variable Fixed expenses Sales salaries Depreciation on delivery equipment Total fixed Total expenses 16,500 13,200 23,100 3,300 56,100 $ $ $ $ $ 17,200 $ 12,000 $ 23,700 $ 2,400 $ 55,300 $ 700 1,200 600 900 800 Bu u PEP 1,500 40,000 $ 10,000 $ 50,000 $ 106,100 $ 41,500$ 10,000 $ 51,500 $ 106,800 $ $ 1,500 700 U Working Variable expenses Sales commissions Advertising Traveling Delivery Budget 330000 x 5% 330000 x 4% 330000 x 7% 330000 x 1% Fixed cost remain same in fixed budget and flexible budget. Variance in Expense is favorable when actual expense is less than Flexible budgeted expenses. Variance in Expense is Unfavorable when actual expense is more than Flexible budgeted expenses.