Lapp Manufacturing uses flexible budgets to control its selling expenses. Monthly sales are expected to be from $400000 to $480000. Variable costs and their percentage relationships to sales are: $$\begin{array} { l l }
\text { Sales commissions } & 6 \% \
\text { Advertising } & 4 \% \
\text { Traveling } & 5 \% \
\text { Delivery } & 1 \%
\end{array}$$ Fixed selling expenses consist of sales salaries $80000 and depreciation on delivery equipment $20000.
Instructions
Prepare a flexible budget for increments of $40000 of sales within the relevant range.

Question

Lapp Manufacturing uses flexible budgets to control its selling expenses. Monthly sales are expected to be from $400000 to $480000. Variable costs and their percentage relationships to sales are: $$\begin{array} { l l } 
\text { Sales commissions } & 6 \% \
\text { Advertising } & 4 \% \
\text { Traveling } & 5 \% \
\text { Delivery } & 1 \%
\end{array}$$ Fixed selling expenses consist of sales salaries $80000 and depreciation on delivery equipment $20000.
Instructions
Prepare a flexible budget for increments of $40000 of sales within the relevant range.

Quizplus · Accepted Answer

The Answer of Lapp Manufacturing uses flexible budgets to control its selling expenses. Monthly sales are expected to be from $400000 to $480000. Variable costs and their percentage relationships to sales are: $$\begin{array} { l l } 
\text { Sales commissions } & 6 \% \
\text { Advertising } & 4 \% \
\text { Traveling } & 5 \% \
\text { Delivery } & 1 \%
\end{array}$$ Fixed selling expenses consist of sales salaries $80000 and depreciation on delivery equipment $20000.
Instructions
Prepare a flexible budget for increments of $40000 of sales within the relevant range.

Lapp Manufacturing Uses Flexible Budgets to Control Its Selling Expenses