Seattle Products estimates that it will incur the following selling expenses next period:Salaries (fixed)$ 20,000Commissions (0.05 of sales revenue) 17,875Travel (0.03 of sales revenue) . 10,725Advertising (fixed). 50,000Sales Office Costs ($4,000 plus $0.05 per unit sold) ..7,250Shipping Costs ($0.10 per unit sold)6,500Total Selling Expenses$112,350 a. Derive the cost equation for selling expenses.b. Assume that Seattle sells 50,000 units during the period. Budgeted sales totaled 65,000 units at a budgeted sales price of $5.50 per unit. Prepare a variance report to show the difference between the master budget and the flexible budget.
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