Hall Company uses flexible budgets to control its selling expenses. Monthly sales are expected to be from $200,000 to $240,000. Variable costs and their percentage relationships to sales are:
Sales commissions 6%
Advertising 4%
Traveling 5%
Delivery 1%
Fixed selling expenses consist of Sales Salaries $40,000 and Depreciation on Delivery Equipment $10,000.
The actual variable selling expenses incurred in February, by Hall Company are as follows:
Sales commissions $13,700
Advertising 8,000
Traveling 11,300
Delivery 1,600
The actual fixed selling expenses incurred in February, consist of Sales Salaries $41,000 and Depreciation on Delivery Equipment $10,000.
Instructions:
Prepare a flexible budget performance report, assuming that February sales were $220,000. Expected and actual sales are the same.