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dvertising expense ravel expense Demonstration models given out Total variable xed expenses Rent Sales salaries Office salaries 234,600 127,000 553,650 8,000 59,600 39 900

dvertising expense ravel expense Demonstration models given out Total variable xed expenses Rent Sales salaries Office salaries 234,600 127,000 553,650 8,000 59,600 39 900

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Advertising expense 39,150 Travel expense 234,600 Demonstration models given out 127,000 Total variable 553,650 Fixed expenses Rent 8,000 Sales salaries 59,600 Office salaries 39,900 Depreciation - vans (sales staff) 2,700 Total fixed 110,200 Total expenses $663,850 Prepare a budget report based on flexible budget data. The new depreciation amount has been included in the budgeted fixed costs. (Round per unit answers to 2 decimal places, e.g. 15.25.)
Transcribed Image Text:Advertising expense 39,150 Travel expense 234,600 Demonstration models given out 127,000 Total variable 553,650 Fixed expenses Rent 8,000 Sales salaries 59,600 Office salaries 39,900 Depreciation - vans (sales staff) 2,700 Total fixed 110,200 Total expenses $663,850 Prepare a budget report based on flexible budget data. The new depreciation amount has been included in the budgeted fixed costs. (Round per unit answers to 2 decimal places, e.g. 15.25.)
After Cooper because familiar with the flexible budget report, he began to analyze the numbers, Cooper feels that sales can be increased if CM Outdoor Company would increase sales commissions to $29.00 per unit. This would allow them to reduce advertising expense to $7.50 per unit. Cooper thinks that these changes will motivate the sales staff to sell at least 5,500 units. He is allowed to try his plan in December and had the following results. CM Outdoor Company Winter Sports Department Results For the Month Ended December 31, 2020 Sales in units 5,500 Variable expenses Sales commissions $152,900 Advertising expense 39,150 Travel expense 234,600 Demonstration models given out 127,000 Total variable 553,650 Fixed expenses
Transcribed Image Text:After Cooper because familiar with the flexible budget report, he began to analyze the numbers, Cooper feels that sales can be increased if CM Outdoor Company would increase sales commissions to $29.00 per unit. This would allow them to reduce advertising expense to $7.50 per unit. Cooper thinks that these changes will motivate the sales staff to sell at least 5,500 units. He is allowed to try his plan in December and had the following results. CM Outdoor Company Winter Sports Department Results For the Month Ended December 31, 2020 Sales in units 5,500 Variable expenses Sales commissions $152,900 Advertising expense 39,150 Travel expense 234,600 Demonstration models given out 127,000 Total variable 553,650 Fixed expenses
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