3. Charity Company wants to analyze the behavior of its selling costs for budgeting purposes. Cost drivers (activity measures) and costs incurred in the first quarter and the first month of the second quarter are as follows: January February March April Selling costs: P 42,500 17,500 38,000 P 42,500 14,000 32,400 25,000 P 51,000 16,000 35,600 20,000 Sales salaries P 42,500 15,000 34,000 20,000 Commissions Shipping costs Advertising 20,000 Cost drivers: Peso sales 300,000 30,000 350,000 35,000 175 280,000 28,000 320,000 32,000 Sales in units Sales orders 150 140 160 The sales staff are paid monthly salaries plus commission. Advertising expense are charged subject to the discretion of management. The increase in sales salaries in April is due to the increase in the sales staff, from five to six persons. 3.1. In relation to the appropriate cost drivers, how should the company's selling costs beclassified? Sales salaries Commissions vaciable variable variable Advertising variable fixed Shipping costs sariable Kariable Kariakls fixed a. b. mixed fixed C. d. fixed mixed variable mixed fixed 3.2. Using the high low method and the algebraic equation yma + bx, the cost formula for the shipping cost is: 3.3. If the company plans to sell 36,000 units in May and fixed costs will remain at the April level, the total selling costs for May would be.
3. Charity Company wants to analyze the behavior of its selling costs for budgeting purposes. Cost drivers (activity measures) and costs incurred in the first quarter and the first month of the second quarter are as follows: January February March April Selling costs: P 42,500 17,500 38,000 P 42,500 14,000 32,400 25,000 P 51,000 16,000 35,600 20,000 Sales salaries P 42,500 15,000 34,000 20,000 Commissions Shipping costs Advertising 20,000 Cost drivers: Peso sales 300,000 30,000 350,000 35,000 175 280,000 28,000 320,000 32,000 Sales in units Sales orders 150 140 160 The sales staff are paid monthly salaries plus commission. Advertising expense are charged subject to the discretion of management. The increase in sales salaries in April is due to the increase in the sales staff, from five to six persons. 3.1. In relation to the appropriate cost drivers, how should the company's selling costs beclassified? Sales salaries Commissions vaciable variable variable Advertising variable fixed Shipping costs sariable Kariable Kariakls fixed a. b. mixed fixed C. d. fixed mixed variable mixed fixed 3.2. Using the high low method and the algebraic equation yma + bx, the cost formula for the shipping cost is: 3.3. If the company plans to sell 36,000 units in May and fixed costs will remain at the April level, the total selling costs for May would be.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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Transcribed Image Text:Activity - Cost According to Cost behavior - ACT 204 - Word
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Segregation of Mixed Costs
3. Charity Company wants to analyze the behavior of its selling costs for budgeting purposes. Cost drivers
(activity measures) and costs incurred in the first quarter and the first month of the second quarter are as
follows:
January
February
March
April
Selling costs:
Sales salaries
P 42.500
P 42,500
P 42,500
14,000
32,400
P51,000
16,000
35,600
Commissions
15,000
34,000
17,500
38,000
Shipping costs
Advertising
20,000
Full 20,000 Snip 25,000
20,000
Cost drivers:
280,000
28,000
Peso sales
300,000
30,000
350,000
35,000
320,000
32,000
Sales in units
Sales orders
150
175
140
160
The sales staff are paid monthly salaries plus commission. Advertising expense are charged subject to the
discretion of management. The increase in sales salaries in April is due to the increase in the sales staff, from
five to six persons.
3.1. In relation to the appropriate cost drivers, how should the company's selling costs beclassified?
Sales salaries
Commissions
Shipping costs
Advertising
variable
variable
variable
variable
Vaciable
mixed
variable
variable
a.
b.
fixed
fixed
C.
fixed
fixed
d.
mixed
variable
mixed
fixed
3.2. Using the high low method and the algebraic equation y=a + bx, the cost formula for the shipping
cost is:
3.3. If the company plans to sell 36,000 units in May and fixed costs will remain at the April level, the
total selling costs for May would be.
4. Belle Company produces and sells rattan baskets. The number of units produced and the corresponding
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