Exercise 22-6 Variable Expenses Fixed Expenses FALLON COMPANY Selling Expense Fl

Question

Exercise 22-6

Variable Expenses

Fixed Expenses

FALLON COMPANY
Selling Expense Flexible Budget Report
For the Month Ended March 31, 2017

Difference

Budget

Actual

Favorable
Unfavorable
Neither Favorable
nor Unfavorable

Exercise 22-6

The actual selling expenses incurred in March 2017 by Fallon Company are as follows.

Variable Expenses

Fixed Expenses

Sales commissions $11,272 Sales salaries $34,900 Advertising 10,552 Depreciation 7,500 Travel 8,685 Insurance 1,600 Delivery 3,534
(a) Prepare a flexible budget performance report for March, assuming that March sales were $173,700. Variable costs and their percentage relationship to sales are sales commissions 6%, advertising 6%, traveling 5%, and delivery 2%. Fixed selling expenses will consist of sales salaries $34,900, Depreciation on delivery equipment $7,500, and insurance on delivery equipment $1,600. (List variable costs before fixed costs.)

FALLON COMPANY
Selling Expense Flexible Budget Report
For the Month Ended March 31, 2017

Difference

Budget

Actual

Favorable
Unfavorable
Neither Favorable
nor Unfavorable

AdvertisingDepreciationDeliveryFixed CostsInsuranceSalesSales CommissionsSales SalariesTotal CostsTotal Fixed CostsTotal Variable CostsTravelVariable Costs

$

$

AdvertisingDepreciationDeliveryFixed CostsInsuranceSalesSales CommissionsSales SalariesTotal CostsTotal Fixed CostsTotal Variable CostsTravelVariable Costs

AdvertisingDepreciationDeliveryFixed CostsInsuranceSalesSales CommissionsSales SalariesTotal CostsTotal Fixed CostsTotal Variable CostsTravelVariable Costs

$

$

$

FavorableUnfavorableNeither Favorable nor Unfavorable

AdvertisingDepreciationDeliveryFixed CostsInsuranceSalesSales CommissionsSales SalariesTotal CostsTotal Fixed CostsTotal Variable CostsTravelVariable Costs

FavorableUnfavorableNeither Favorable nor Unfavorable

AdvertisingDepreciationDeliveryFixed CostsInsuranceSalesSales CommissionsSales SalariesTotal CostsTotal Fixed CostsTotal Variable CostsTravelVariable Costs

FavorableUnfavorableNeither Favorable nor Unfavorable

AdvertisingDepreciationDeliveryFixed CostsInsuranceSalesSales CommissionsSales SalariesTotal CostsTotal Fixed CostsTotal Variable CostsTravelVariable Costs

FavorableUnfavorableNeither Favorable nor Unfavorable

AdvertisingDepreciationDeliveryFixed CostsInsuranceSalesSales CommissionsSales SalariesTotal CostsTotal Fixed CostsTotal Variable CostsTravelVariable Costs

FavorableUnfavorableNeither Favorable nor Unfavorable

AdvertisingDepreciationDeliveryFixed CostsInsuranceSalesSales CommissionsSales SalariesTotal CostsTotal Fixed CostsTotal Variable CostsTravelVariable Costs

AdvertisingDepreciationDeliveryFixed CostsInsuranceSalesSales CommissionsSales SalariesTotal CostsTotal Fixed CostsTotal Variable CostsTravelVariable Costs

FavorableUnfavorableNeither Favorable nor Unfavorable

AdvertisingDepreciationDeliveryFixed CostsInsuranceSalesSales CommissionsSales SalariesTotal CostsTotal Fixed CostsTotal Variable CostsTravelVariable Costs

FavorableUnfavorableNeither Favorable nor Unfavorable

AdvertisingDepreciationDeliveryFixed CostsInsuranceSalesSales CommissionsSales SalariesTotal CostsTotal Fixed CostsTotal Variable CostsTravelVariable Costs

FavorableUnfavorableNeither Favorable nor Unfavorable

AdvertisingDepreciationDeliveryFixed CostsInsuranceSalesSales CommissionsSales SalariesTotal CostsTotal Fixed CostsTotal Variable CostsTravelVariable Costs

FavorableUnfavorableNeither Favorable nor Unfavorable

AdvertisingDepreciationDeliveryFixed CostsInsuranceSalesSales CommissionsSales SalariesTotal CostsTotal Fixed CostsTotal Variable CostsTravelVariable Costs

$

$

$

FavorableUnfavorableNeither Favorable nor Unfavorable

Explanation / Answer

Budget Actual Difference Sales 173700 173700 Variable expenses: Sales commissions 10422 11272 850 Unfavorable Advertising 10422 10552 130 Unfavorable Traveling 8685 8685 0 Neither Favorable nor Unfavorable Delivery 3474 3534 60 Unfavorable Total variable expenses 33003 34043 1040 Unfavorable Fixed expenses: Sales salaries 34900 34900 0 Neither Favorable nor Unfavorable Depreciation 7500 7500 0 Neither Favorable nor Unfavorable Insurance 1600 1600 0 Neither Favorable nor Unfavorable Total fixed expenses 44000 44000 0 Neither Favorable nor Unfavorable Total costs 77003 78043 1040 Unfavorable

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