Reference no: EM132067489
This is a telemarketing company and our standard is that call for $450 of sales per hour of telephone calling time.
Commission per call is 10% of dollar sales (additional variable cost). We expect other variable costs to be 45% of revenue. Fixed costs is at $411,500 per month. This month we expected 180 hours of telephone calling time for each of the 40 employees. We had $2,700,000 in revenues. Marketing and administrative cost data for the month are on the table below.
Q) I want to know the difference (variance) between my master budget and my flexible budget for total costs if I consider sales volume as output measure.
Actual | Master Budget
Cost of sales 810,000 | 972,000
Phone time charges 32,200 | 32,400
Delivery services 161,100 | 194,400
Uncollectable Accts 121,500 | 145,800
Other Variable costs 112,700 | 113,400
Fixed costs 409,000 | 411,500