Osage, Inc., manufactures and sells lamps. The company produces only when it receives orders and, therefore, has no inventories. The following information is available for the current month:     Actual (based on actual orders for 450,000 units)   Master Budget (based on budgeted orders for 480,000 units) Sales revenue   $ 4,490,000         $ 4,320,000     Less                       Variable costs                       Materials     1,536,000           1,536,000     Direct labor     243,000           312,000     Variable overhead     627,600           576,000     Variable marketing and administrative     397,500           408,000     Total variable costs   $ 2,804,100         $ 2,832,000     Contribution margin   $ 1,685,900         $ 1,488,000     Less                       Fixed costs                       Manufacturing overhead     628,800           600,000     Marketing     190,000           190,000     Administrative     133,500           112,500     Total fixed costs   $ 952,300         $ 902,500     Operating profits   $ 733,600         $ 585,500         Required: Prepare a sales activity variance analysis for Osage, Inc. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.)

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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Osage, Inc., manufactures and sells lamps. The company produces only when it receives orders and, therefore, has no inventories. The following information is available for the current month:
 

  Actual (based on actual orders for 450,000 units)   Master Budget (based on budgeted orders for 480,000 units)
Sales revenue   $ 4,490,000         $ 4,320,000    
Less                      
Variable costs                      
Materials     1,536,000           1,536,000    
Direct labor     243,000           312,000    
Variable overhead     627,600           576,000    
Variable marketing and administrative     397,500           408,000    
Total variable costs   $ 2,804,100         $ 2,832,000    
Contribution margin   $ 1,685,900         $ 1,488,000    
Less                      
Fixed costs                      
Manufacturing overhead     628,800           600,000    
Marketing     190,000           190,000    
Administrative     133,500           112,500    
Total fixed costs   $ 952,300         $ 902,500    
Operating profits   $ 733,600         $ 585,500    
 

 

Required:

Prepare a sales activity variance analysis for Osage, Inc. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.)

The following information is available for the current month:
Actual (based on
actual orders for
450,000 units)
$4,490,000
Master Budget (based
on budgeted orders
for 480,000 units)
$4,320,000
Sales revenue
Less
Variable costs
1,536,000
312,000
Materials
1,536,000
243,000
627,600
Direct labor
Variable overhead
Variable marketing and administrative
Total variable costs
576,000
408,000
$2,832,000
397,500
$2,804,100
Contribution margin
$1,685,900
$1,488,000
Less
Fixed costs
Manufacturing overhead
Marketing
Administrative
628,800
190,000
133,500
600,000
190,000
112,500
Total fixed costs
952,300
$ 902,500
Operating profits
$ 733,600
585,500
Transcribed Image Text:The following information is available for the current month: Actual (based on actual orders for 450,000 units) $4,490,000 Master Budget (based on budgeted orders for 480,000 units) $4,320,000 Sales revenue Less Variable costs 1,536,000 312,000 Materials 1,536,000 243,000 627,600 Direct labor Variable overhead Variable marketing and administrative Total variable costs 576,000 408,000 $2,832,000 397,500 $2,804,100 Contribution margin $1,685,900 $1,488,000 Less Fixed costs Manufacturing overhead Marketing Administrative 628,800 190,000 133,500 600,000 190,000 112,500 Total fixed costs 952,300 $ 902,500 Operating profits $ 733,600 585,500
Required:
Prepare a sales activity variance analysis for Osage, Inc. (Do not round intermediate calculations. Indicate the effect of each
variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.)
OSAGE, INC.
Sales Activity Variance
Flexible
Budget
Sales Activity
Variance
Master Budget
Sales revenue
Variable costs:
Materials
Direct labor
Variable overhead
Variable marketing and administrative
Total variable costs
Contribution margin
Fixed costs:
Manufacturing overhead
Marketing
Administrative
Total fixed costs
Operating profits
Transcribed Image Text:Required: Prepare a sales activity variance analysis for Osage, Inc. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.) OSAGE, INC. Sales Activity Variance Flexible Budget Sales Activity Variance Master Budget Sales revenue Variable costs: Materials Direct labor Variable overhead Variable marketing and administrative Total variable costs Contribution margin Fixed costs: Manufacturing overhead Marketing Administrative Total fixed costs Operating profits
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