Lapp Manufacturing Uses Flexible Budgets to Control Its Selling Expenses

Essay

Lapp Manufacturing uses flexible budgets to control its selling expenses. Monthly sales are expected to be from $400000 to $480000. Variable costs and their percentage relationships to sales are: $$\begin{array} { l l } \text { Sales commissions } & 6 \% \\\text { Advertising } & 4 \% \\\text { Traveling } & 5 \% \\\text { Delivery } & 1 \%\end{array}$$ Fixed selling expenses consist of sales salaries $80000 and depreciation on delivery equipment $20000.
Instructions
Prepare a flexible budget for increments of $40000 of sales within the relevant range.