Estimating Flexible Selling Expense Budget and Computing Variances

question 52

Essay

Estimating flexible selling expense budget and computing variances.Golden Nugget estimates the following selling expenses next period:

Required:
a.Derive the cost equation (y = a + bx)for selling expenses.(Hint: y = a + bx + cy. )
b.Assume that Golden actually sells 60,000 units during the period at an average price of $7 per unit.The company had budgeted sales for the period to be: volume,75,000 units;price,$6.50.Calculate the sales price and volume variance.
c.The actual selling expenses incurred during the period were $90,000 fixed and $40,000 variable.Prepare a profit variance analysis for sales revenue and selling expenses.

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Definitions:

Prestige

Prestige denotes the respect, admiration, or deference a person or group garners from others, based on accomplishments, quality, or social status.

Parties

Social gatherings or celebrations where people come together to enjoy entertainment, companionship, and often food and drink.

Individual Attributes

Qualities, traits, or characteristics that distinguish or define a person as an individual.

Poverty

A condition where individuals or communities lack the financial resources and essentials for a minimum standard of living, leading to limited access to basic needs such as food, shelter, and healthcare.