In an effort to control selling expenses, the Sell Big Corporation wants to develop a cost volume formula for its selling expenses. An investigation of individual expense items shows
|
Sales commissions |
Fixed
|
Variable 30% of sales |
|
Advertising |
$50,000 |
|
|
Travel and entertainment |
30,000 |
5% of sales |
|
Sales staff salaries |
12,000 |
|
|
Depreciation, rent, and insurance sales office |
5,000 |
Determine the cost volume formula in the form of y‘ = a + bx.