Problem:
The actual selling expenses incurred in March 2012 by DeWitt 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 E21-5, 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 theperformance of the sales manager.