The actual selling expenses incurred in March 2012 by Russell Company are as follows.
|
Variable Expenses |
Fixed Expenses |
||
|
Sales commissions |
$9,200 |
Sales salaries |
$34,000 |
|
Advertising |
7,000 |
Depreciation |
7,000 |
|
Travel |
5,100 |
Insurance |
1,000 |
|
Delivery |
3,500 |
Instructions
(a) Prepare a flexible budget performance report for March using the budget data in E24 5, assuming that March sales were $170,000. Expected and actual sales are the same.
(b) Prepare a flexible budget performance report, assuming that March sales were $180,000.Expected sales and actual sales are the same.
(c) Comment on the importance of using flexible budgets in evaluating the performance of the sales manager.