LOSLS DIoauet costs and sunk costs fixed costs variable cost

LOSLS, DIoauet costs, and sunk costs fixed costs, variable costs, and mixed costs 5. Ex.06-168 Selling Expense Budget Sales volume Labels and Amount Descriptions $300,000.00 $350,000.00 $400,000.00 Labs December 31, 2016 For the Month Ending December 31, 2016 2 Variable expense: The Cottonwood Company for sales volumes of $300,000, $350,000, and $400,000, based on the following data Sales commissions Sales manager\'s salary Advertising expense Shipping expense 6% of sales $120.000 per month $90,000 per month 1% of sales $6,000 per month plus 1.5% of sales Advertising expense Miscellaneous selling Fixed expense Sales salaries expense Sales volume Shipping expense expense Required: 12 Prepare a monthly flexible selling expense budget for Cottonwood Company for December, 2016. Refer to the lists of Labels and Amount Total selling expense 6. MC.04-156 The difference between the current sales revenue and the sales at the break-even point is called the operating leverage price factor

Solution

Answer

1

Sales Volume

300000

350000

400000

2

Variable Expense:

3= 1 x 6%

Sales Commission

18000

21000

24000

4 = 1 x 1%

Shipping Expense

3000

3500

4000

5 = 1 x 1.5%

Miscellaneous Selling Expenses

4500

5250

6000

6 = 3+4+5

Total variable expenses

25500

29750

34000

7

Fixed Expenses:

8

Sales Salaries Expenses

120000

120000

120000

9

Advertising expense

90000

90000

90000

10

Miscellaneous Selling Expenses

6000

6000

6000

11=8+9+10

Total Fixed Expenses

216000

216000

216000

12 = 6 + 11

Total Selling Expenses

241500

245750

250000

1	Sales Volume	300000	350000	400000
2	Variable Expense:
3= 1 x 6%	Sales Commission	18000	21000	24000
4 = 1 x 1%	Shipping Expense	3000	3500	4000
5 = 1 x 1.5%	Miscellaneous Selling Expenses	4500	5250	6000
6 = 3+4+5	Total variable expenses	25500	29750	34000
7	Fixed Expenses:
8	Sales Salaries Expenses	120000	120000	120000
9	Advertising expense	90000	90000	90000
10	Miscellaneous Selling Expenses	6000	6000	6000
11=8+9+10	Total Fixed Expenses	216000	216000	216000
12 = 6 + 11	Total Selling Expenses	241500	245750	250000