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commission expense is budgeted to be $16,000 at a planned sales level of 4,000 units. if only 2,900 units are sold, how much commission expense will appear on the flexible budget, and is the activity variance favorable or unfavorable?

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adioabiola

The amount of commission expense that will appear on the flexible budget if 2900 units were sold is; $11600

The activity variance is favourable.

According to the question;

  • The budgeted commission expenses is to be $16,000 at a planned sales level of 4,000 units.
  • However, only 2900 units are sold.

To solve this;

We must be aware that the commission expense is directly proportional to the number of units sold.

In essence;

  • $16,000 is expected at 4,000 units of sale.
  • Therefore, $x is expected at 2,900 units of sale.

By cross product;

  • x = (2900 × 16000)/4000

  • x = $11,600

Ultimately, the activity variance is favourable bas less commission expense is recorded for less sale.

Read more;

https://brainly.com/question/24487497

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