... anyone to ascertain with any feeling of certainty the reasonableness of the estimates made by the various department heads. Second, selling conditions often changed substantially after the budget was adopted, but there was no provision for making the proper corresponding changes in the selling expense budget. As a means of overcoming these weaknesses the president suggested the possibility of setting selling cost budget standards on a fixed and variable basis. Analysis and Interpretation of Available Data The controller was convinced that the fixed portion of selling expenses-the portion independent of any fluctuation in sales volume-could be established by determining the amount of expenses that had to be incurred at the minimum sales volume at which the company was likely to operate. He decided that the variable portion of the selling expense standard should be expressed as a certain amount per sales dollar and believed that a budget varied with sales ...

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