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Question - Bay Harbour Natural Skincare is a proud Canadian company that manufactures skincare products made of non-toxic, eco-friendly and cruelty-free materials. The mission of the company is to bring the luxury of natural skincare to the everyday family beauty routine. Since 2005, the company has been using the flexible budgets to control its selling and administrative expenses. In particular, for 2021, the relevant range for the monthly sales is set from $500,000 to $600,000. The variable costs consist of sales commissions (6.0% of sales), promotions (5.2% of sales), distribution (9.0% of sales) and online ads costs (3.5% of sales). The monthly fixed selling expenses consist of the salespersons wages $52,000 and rent of the showroom $11,050. During the month of January 2021, the company incurred the following selling expenses:
Distribution $39,923
Online Ads 16,385
Promotions 20,995
Rent of showroom 11,050
Salespersons wages 53,625
Selling commissions 31,363
Required - Given that the actual sales for January 2021 are $507,000, prepare a flexible budget performance report for the selling expenses.
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