(Answered)-Estimating flexible selling expense budget and computing sales - (2025 Updated Original AI-Free Solution

Question

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Estimating flexible selling expense budget and computing sales volume variance. Seattle Products estimates that it will incur the following selling expenses next period:

Salaries (fixed)	$ 20,000
Commissions? (0.05? of? sales ?revenue)	17,875
Travel (0.03 of sales revenue)	10,725
Advertising (fixed)	50,000
Sales Office Costs ($4,000 plus $0.05 per unit sold)	7,250
Shipping Costs ($0.10 per unit sold)	6,500
Total Selling Expenses	$112,350

a. Derive the cost equation for selling expenses.

?(Hint: y= a + bx + cy)

b. Assume that Seattle sells 50,000 units during the period. Budgeted sales totaled 65,000 units at a budgeted sales price of $5.50 per unit. Prepare a variance report to show the difference between the master budget and the flexible budget.

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a)
Y= a + bx + cy
A denotes Fixed Cost , x would be Sales Revenue and y would be Sales Unit, b is the variable cost per
sales revenue , c would be variable cost per unit sold
Fixed Cost = Salaries...