Question:
1. 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
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Sales commissions
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Fixed
-------
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Variable
30% of sales
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Advertising
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$50,000
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-------
|
|
Travel and entertainment
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30,000
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5% of sales
|
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Sales staff salaries
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12,000
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-------
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Depreciation, rent, and insurance -sales office
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5,000
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-------
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Determine the cost-volume formula in the form of y' = a + bx.