Trusler Company uses flexible budgets to control its selling expenses. Monthly s
ID: 2376709 • Letter: T
Question
Trusler Company uses flexible budgets to control its selling expenses. Monthly sales are expected to range from $170,000 to $200,000. Variable costs and their percentage relationship to sales are: Sales Commissions 5%, Advertising 4%, Traveling 3%, and Delivery 2%. Fixed selling expenses will consist of Sales Salaries $34,000, Depreciation on Delivery Equipment $7,000, and Insurance on Delivery Equipment $1,000.
Instructions
Complete the monthly flexible budget for each $10,000 increment of sales within the relevant range for the year ending December 31, 2012
TRUSLER COMPANY
Monthly Flexible Selling Expense Budget
For the Year 2012
Activity Level
Sales ___ ___ ___ ___
Variable Costs
Sales Commision ___ ___ ___ ___
Advertising ___ ___ ___ ___
Traveling ___ ___ ___ ___
Delivery ___ ___ ___ ___
Total Variable Expenses ___ ___ ___ ___
Fixed Costs
Depreciation ___ ___ ___ ___
Insurance ___ ___ ___ ___
Total fixed expenses ___ ___ ___ ___
Explanation / Answer
Sales : 170000 180000 190000 200000
Variable costs
Sales commissions 8500 9000 9500 10000
Advertising 6800 7200 7600 8000
Travelling 5100 5400 5700 6000
Delivary 3400 3600 3800 4000
Total variable exp : 23800 25200 26600 28000
Depreciation 7000 7412 7823 8234
salaries 34000 36000 38000 40000
insurance 1000 1058.82 1117.64 1176.46
Fixed Costs 42000 44470.82 46940.64 49410.6
cheers :)