Prepare a monthly flexible selling expense budget for Cottonwood Company for sales volumes of $300,000, $350,000, and $400,000, based on the following data: Sales commissions 6% of sales Sales manager's salary $120,000 per month Advertising expense $90,000 per month Shipping expense 1% of sales Miscellaneous selling expense $6,000 per month plus 1.5% of sales

Sales volumes                               $300,000       $350,000      $400,000

Total selling expenses                  $541,500        $595,750      $650,000

Explanation:

Basically, a flexible budget can be described as a budget that adjusts with changes in volume or activity.

Therefore, monthly flexible selling expense budget for Cottonwood Company which adjusts with sales volumes can be prepared as follows:

Cottonwood Company

Monthly Flexible Selling Expense Budget

For the Month

Details                                                    $                      $                      $      

Sales volumes                                300,000           350,000      400,000

Variable selling expenses:

Sales comm. (6% of sales)                18,000              21,000           24,000

Shipping exp. (1% of sales)                 3,000               3,500             4,000

Misc. selling exp. (1.5% of sales)        4,500               5,250             6,000

Fixed selling expenses:

Sales manager's salary                  120,000            120,000         120,000

Advertising expense                       90,000             90,000           90,000

Misc. selling expense                        6,000               6,000             6,000  

Total selling expenses                 541,500            595,750        650,000

a. primarily outdoors, responding to emergencies and protecting people.

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