Prepare flexible budget:

Oak Grove, Inc., reports the following information concerning operations for the most recent month. There are no inventories.

Actual (based on actual of 1080 units)

Sales revenue $176,640

Less manufacturing costs

Direct labor 27,264

Materials 23,040

Variable overhead 15,744

Marketing 10,076

Administrative 9,600

Total variable costs $85,824

Contribution margin $90,816

Fixed costs

Manufacturing 9,380

Marketing 19,968

Administrative 19,122

Total fixed costs $48,420

Operating profits $42,396

Master Budget (based on budgeted 1,200 units)

Sales revenue $192,000

Less manufacturing costs

Direct labor 28,800

Materials 26,880

Variable overhead 19,200

Marketing 11,520

Administrative 9,600

Total variable costs $96,000

Contribution margin $96,000

Fixed costs

Manufacturing 9,600

Marketing 19,200

Administrative 19,200

Total fixed costs $48,000

Operating profits $48,000