Cadiz Co Uses Flexible Budgets to Control Its Selling Expenses

question 151

Essay

Cadiz Co. uses flexible budgets to control its selling expenses. Monthly sales are expected to be from $300,000 to $360,000. 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, 2016, by Cadiz are as follows:
Fixed selling expenses consist of sales salaries $41,500 and depreciation on delivery equipment $10,000.
Instructions
Prepare a flexible budget performance report, assuming that February sales were $330,000.

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Definitions:

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Designing a structured approach to achieve a specific goal or solve a problem.

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