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 Master Budget (based on
orders for 453,000 units) budgeted orders for 486,000 units)
Sales revenue $ 4,971,000 $ 4,860,000
Less Variable costs
Materials 1,455,000 1,458,000
Direct labor 279,000 340,200
Variable overhead 674,700 631,800
Variable marketing and-
administrative 474,000 486,000
Total variable costs $ 2,882,700 $ 2,916,000
Contribution margin $ 2,088,300 $ 1,944,000
Less Fixed costs
Manufacturing overhead 989,400 960,300
Marketing 291,000 291,000
Administrative 207,000 180,300
Total fixed costs $ 1,487,400 $ 1,431,600
Operating profits $ 600,900 $ 512,400
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.
Answers: 2
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