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 $ 4,966,000 $ 4,800,000 Less Variable costs Materials 1,536,000 1,536,000 Direct labor 250,000 312,000 Variable overhead 627,400 576,000 Variable marketing and administrative 466,000 480,000 Total variable costs $ 2,879,400 $ 2,904,000 Contribution margin $ 2,086,600 $ 1,896,000 Less Fixed costs Manufacturing overhead 578,300 550,000 Marketing 185,000 185,000 Administrative 125,000 105,000 Total fixed costs $ 888,300 $ 840,000 Operating profits $ 1,198,300 $ 1,056,000 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.)

Name: Osage, Inc., manufactures and sells lamps. The company produces only w
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Description: 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 B

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter10: Standard Costing And Variance Analysis

Section: Chapter Questions

Problem 39BEB: Variable Overhead Spending and Efficiency Variances, Columnar and Formula Approaches Aretha Company...

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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		$	4,966,000	$	4,800,000
Less
Variable costs
Materials			1,536,000		1,536,000
Direct labor			250,000		312,000
Variable overhead			627,400		576,000
Variable marketing and administrative			466,000		480,000
Total variable costs		$	2,879,400	$	2,904,000
Contribution margin		$	2,086,600	$	1,896,000
Less
Fixed costs
Manufacturing overhead			578,300		550,000
Marketing			185,000		185,000
Administrative			125,000		105,000
Total fixed costs		$	888,300	$	840,000
Operating profits		$	1,198,300	$	1,056,000

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
Sales Activity
Master Budget
Budget
Variance
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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