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Question 4 A). Briefly discuss the difference between traditional costing and activity-based costing ( B). TruValue Company uses flexible budget to control its selling expenses. Monthly sales are expected to range from $170,000 to $200,000. Variable costs and their percentage relationship to sales are sales commission 6%, advertising 4%, traveling 3% and delivery 2%. Fixed selling expenses will consist of sales salaries $35,000, depreciation on delivery equipment $7,000, and insurance on delivery equipment $1,000. The actual selling expenses incurred in March, 2023 are: Variable Expenses Sales commission Advertising Travel Delivery $11,000 6,900 5,100 3,450 Fixed Expenses $35,000 Sales salaries Depreciation Insurance 7,000 1,000 a) Prepare a monthly flexible budget for each $10,000 increment of sales within the relevant range for the year ending December 31, 2023. b) Prepare a flexible budget performance report for March, assuming that March sales were $170,000. c) Comment on the Management's efficiency in controlling selling expenses in March. [ 3 dt کار

Question 4 A). Briefly discuss the difference between traditional costing and activity-based costing ( B). TruValue Company uses flexible budget to control its selling expenses. Monthly sales are expected to range from $170,000 to $200,000. Variable costs and their percentage relationship to sales are sales commission 6%, advertising 4%, traveling 3% and delivery 2%. Fixed selling expenses will consist of sales salaries $35,000, depreciation on delivery equipment $7,000, and insurance on delivery equipment $1,000. The actual selling expenses incurred in March, 2023 are: Variable Expenses Sales commission Advertising Travel Delivery $11,000 6,900 5,100 3,450 Fixed Expenses $35,000 Sales salaries Depreciation Insurance 7,000 1,000 a) Prepare a monthly flexible budget for each $10,000 increment of sales within the relevant range for the year ending December 31, 2023. b) Prepare a flexible budget performance report for March, assuming that March sales were $170,000. c) Comment on the Management's efficiency in controlling selling expenses in March. [ 3 dt کار

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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Question 4 A). Briefly discuss the difference between traditional costing and activity-based costing ( B). TruValue Company uses flexible budget to control its selling expenses. Monthly sales are expected to range from $170,000 to $200,000. Variable costs and their percentage relationship to sales are sales commission 6%, advertising 4%, traveling 3% and delivery 2%. Fixed selling expenses will consist of sales salaries $35,000, depreciation on delivery equipment $7,000, and insurance on delivery equipment $1,000. The actual selling expenses incurred in March, 2023 are: Variable Expenses Sales commission Advertising Travel Delivery $11,000 6,900 5,100 3,450 Fixed Expenses $35,000 Sales salaries Depreciation Insurance 7,000 1,000 a) Prepare a monthly flexible budget for each $10,000 increment of sales within the relevant range for the year ending December 31, 2023. b) Prepare a flexible budget performance report for March, assuming that March sales were $170,000. c) Comment on the Management's efficiency in controlling selling expenses in March. [ 3 dt کار
Transcribed Image Text:Question 4 A). Briefly discuss the difference between traditional costing and activity-based costing ( B). TruValue Company uses flexible budget to control its selling expenses. Monthly sales are expected to range from $170,000 to $200,000. Variable costs and their percentage relationship to sales are sales commission 6%, advertising 4%, traveling 3% and delivery 2%. Fixed selling expenses will consist of sales salaries $35,000, depreciation on delivery equipment $7,000, and insurance on delivery equipment $1,000. The actual selling expenses incurred in March, 2023 are: Variable Expenses Sales commission Advertising Travel Delivery $11,000 6,900 5,100 3,450 Fixed Expenses $35,000 Sales salaries Depreciation Insurance 7,000 1,000 a) Prepare a monthly flexible budget for each $10,000 increment of sales within the relevant range for the year ending December 31, 2023. b) Prepare a flexible budget performance report for March, assuming that March sales were $170,000. c) Comment on the Management's efficiency in controlling selling expenses in March. [ 3 dt کار
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