Exercise 22-6 Variable Expenses Fixed Expenses FALLON COMPANY Selling Expense Fl
ID: 2574590 • Letter: E
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
FALLON COMPANY
Selling Expense Flexible Budget Report
For the Month Ended March 31, 2017
Difference
Budget
Actual
Favorable
Unfavorable
Neither Favorable
nor Unfavorable
Open Show Work
Exercise 22-6
Your answer is partially correct. Try again. 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
(b) Prepare a flexible budget performance report, assuming that March sales were $181,000. (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
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Explanation / Answer
a) flexible budget performance report for March is as prepared below:
FALLON COMPANY Selling Expense Flexible Budget Report For the Month Ended March 31, 2017 Difference Budget Actual Favorable Unfavorable Neither Favorable Nor Unfavourable Sales 173,700 173,700 Variable Costs Sales Commissions 10422 11,272 850 Unfavourable Advertising 10422 10,552 130 Unfavourable Travel 8685 8,685 0 Neither favourable nor unfavourable Delivery 3474 3,534 60 Unfavourable Total variable costs 33003 34,043 1,040 Unfavourable Fixed Costs Sales Salaries 34,900 34,900 0 Neither favourable nor unfavourable Depreciation 7,500 7,500 0 Neither favourable nor unfavourable Insurance 1,600 1,600 0 Neither favourable nor unfavourable Total fixed costs 44,000 44,000 0 Neither favourable nor unfavourable Total Costs 77,003 78,043 1,040 Unfavourable FALLON COMPANY Selling Expense Flexible Budget Report For the Month Ended March 31, 2017 Difference Budget Actual Favorable Unfavorable Neither Favorable Nor Unfavourable Sales 181,000 181,000 Variable Costs Sales Commissions 10860 11,272 412 Unfavorable Advertising 10860 10,552 -308 Favourable Travel 9050 8,685 -365 Favourable Delivery 3620 3,534 -86 Favourable Total Variable Costs 34390 34,043 -347 Favourable Fixed Costs Sales Salaries 34,900 34,900 0 Neither Favorable nor Unfavorable Depreciation 7,500 7,500 0 Neither Favorable nor Unfavorable Insurance 1,600 1,600 0 Neither Favorable nor Unfavorable Total Fixed Costs 44,000 44,000 0 Neither Favorable nor Unfavorable Total Costs 78,390 78,043 -347 FavourableRelated Questions
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