European Motors Ltd uses flexible budgets in order to control selling expenses.

Monthly sales range from $200 000 to $300 000. Budgeted fixed monthly expenses for the Sales Department are $63 000 for salaries of sales staff, $5000 for depreciation of equipment, and $12 000 for insurance. Variable expenses expressed as a percentage of sales are: training expenses for sales staff, 5%; advertising, 12%; sales commissions, 3%; and sundry selling expenses, 2%.

Required

Prepare a flexible budget using increments of $50 000 over the expected range of sales.