Kraus Company Uses Flexible Budgets to Control Its Selling Expenses

question 147

Essay

Kraus Company uses flexible budgets to control its selling expenses. Monthly sales are expected to be from $200,000 to $240,000. 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, 2010, by Molle Company are as follows:
Fixed selling expenses consist of sales salaries $41,000 and depreciation on delivery equipment $10,000.
Instructions
Prepare a flexible budget performance report, assuming that February sales were $220,000.

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Definitions:

Panic Disorder

A mental health condition characterized by sudden and repeated episodes of intense fear accompanied by physical symptoms.

Anxiety Disorders

A group of mental health disorders characterized by significant fear and anxiety that impair social, occupational, or other important areas of functioning.

Stress

Any circumstances that threaten or are perceived to threaten one’s well-being and thereby tax one’s coping abilities.

Preparedness

The state of being ready and well-prepared for specific situations or events.