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Exercise 16-29 Profit Variance Analysis (LO 16-4) (PLEASE INCLUDE STEP BY STEP CALCULATIONS) Osage, Inc., manufactures and sells lamps. The company produces only when it
Exercise 16-29 Profit Variance Analysis (LO 16-4)
(PLEASE INCLUDE STEP BY STEP CALCULATIONS)
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 464,000 units) | Master Budget (based on budgeted orders for 508,000 units) | ||||||||||
Sales revenue | $ | 4,982,000 | $ | 5,080,000 | |||||||
Less | |||||||||||
Variable costs | |||||||||||
Materials | 1,510,000 | 1,524,000 | |||||||||
Direct labor | 290,000 | 355,600 | |||||||||
Variable overhead | 675,800 | 660,400 | |||||||||
Variable marketing and administrative | 496,000 | 508,000 | |||||||||
Total variable costs | $ | 2,971,800 | $ | 3,048,000 | |||||||
Contribution margin | $ | 2,010,200 | $ | 2,032,000 | |||||||
Less | |||||||||||
Fixed costs | |||||||||||
Manufacturing overhead | 991,600 | 961,400 | |||||||||
Marketing | 302,000 | 302,000 | |||||||||
Administrative | 218,000 | 181,400 | |||||||||
Total fixed costs | $ | 1,511,600 | $ | 1,444,800 | |||||||
Operating profits | $ | 498,600 | $ | 587,200 | |||||||
Required:
Prepare a profit 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.)
Exercise 16-29 Profit Variance Analysis (LO 16-4) 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 onMaster Budget (based actual orders for on budgeted orders for 464,000 units) $4,982,000 508,000 units) $5.080.000 Sales revenue Less Variable costs 1,524,000 355,600 660,400 508,000 Materials Direct labor Variable overhead Variable marketing and administrative 1,510,000 290,000 675.800 496.000 Total variable costs Contribution margin Less Fixed costs 991,600 302,000 218,000 961,400 302,000 181.400 Manufacturing overhead Marketing Administrative Total fixed costs Operating profits S 498,600 S 587,200 Required Prepare a profit 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, IN Profit Variance Analysis Marketing and Administrative Variances Manufacturing Variances Sales Price Variance Flexible Budget Sales Activity Variance Master Budget Actual Sales revenue $ 4,982,000 S 5,080,000 Variable costs Materials Direct labor Variable overhead Variable marketing and administrative 1,510,000 290,000 675,800 496,000 $ 2,971,800 $ 2,010,200 1,524,000 355,600 660,400 508,000 S 3,048,000 S 2,032,000 Total variable costs Contribution margin Fixed costs Manufacturing overhead Marketing Administrative 991,600 302,000 218,000 $ 1,511,600 $ 498,600 961.400 302,000 181,400 S 1,444,800 S 587,200 Total fixed costs Operating profits
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