Cadiz Co. uses flexible budgets to control its selling expenses. Monthly sales are expected to be from $300,000 to $360,000. Variable costs and their percentage relationships to sales are:
Fixed selling expenses consist of sales salaries $40,000 and depreciation on delivery equipment $10,000.
The actual selling expenses incurred in February, 2016, by Cadiz are as follows:
Fixed selling expenses consist of sales salaries $41,500 and depreciation on delivery equipment $10,000.
Instructions
Prepare a flexible budget performance report, assuming that February sales were $330,000.

Question

Cadiz Co. uses flexible budgets to control its selling expenses. Monthly sales are expected to be from $300,000 to $360,000. Variable costs and their percentage relationships to sales are:  
Fixed selling expenses consist of sales salaries $40,000 and depreciation on delivery equipment $10,000.
The actual selling expenses incurred in February, 2016, by Cadiz are as follows:  
Fixed selling expenses consist of sales salaries $41,500 and depreciation on delivery equipment $10,000.
Instructions
Prepare a flexible budget performance report, assuming that February sales were $330,000.

Quizplus · Accepted Answer

The Answer of Cadiz Co. uses flexible budgets to control its selling expenses. Monthly sales are expected to be from $300,000 to $360,000. Variable costs and their percentage relationships to sales are:  
Fixed selling expenses consist of sales salaries $40,000 and depreciation on delivery equipment $10,000.
The actual selling expenses incurred in February, 2016, by Cadiz are as follows:  
Fixed selling expenses consist of sales salaries $41,500 and depreciation on delivery equipment $10,000.
Instructions
Prepare a flexible budget performance report, assuming that February sales were $330,000.

Cadiz Co Uses Flexible Budgets to Control Its Selling Expenses