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 onactual orders for450,000 units)$4,490,000Master Budget (basedon budgeted ordersfor 480,000 units)$4,320,000Sales revenueLessVariable costs1,536,000312,000Materials1,536,000243,000627,600Direct laborVariable overheadVariable marketing and administrativeTotal variable costs576,000408,000$2,832,000397,500$2,804,100Contribution margin$1,685,900$1,488,000LessFixed costsManufacturing overheadMarketingAdministrative628,800190,000133,500600,000190,000112,500Total fixed costs952,300$ 902,500Operating profits$ 733,600585,500 Required:Prepare a sales activity variance analysis for Osage, Inc. (Do not round intermediate calculations. Indicate the effect of eachvariance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.)OSAGE, INC.Sales Activity VarianceFlexibleBudgetSales ActivityVarianceMaster BudgetSales revenueVariable costs:MaterialsDirect laborVariable overheadVariable marketing and administrativeTotal variable costsContribution marginFixed costs:Manufacturing overheadMarketingAdministrativeTotal fixed costsOperating profits

Sales Variance is basically a difference between actual sales and budgeted sales. Sales Variance are…

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.)

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter22: Budgeting

Section: Chapter Questions

Problem 2E: Digital Solutions Inc. uses flexible budgets that are based on the following data: Prepare a...

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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

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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