Osage, Inc., manufactures and sells lamps. The company produces only when it receives orders and,...
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Accounting
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 | $ | 4,487,000 | $ | 4,320,000 | |||||||
| Less | |||||||||||
| Variable costs | |||||||||||
| Materials | 1,680,000 | 1,680,000 | |||||||||
| Direct labor | 218,000 | 288,000 | |||||||||
| Variable overhead | 627,400 | 576,000 | |||||||||
| Variable marketing and administrative | 445,000 | 456,000 | |||||||||
| Total variable costs | $ | 2,970,400 | $ | 3,000,000 | |||||||
| Contribution margin | $ | 1,516,600 | $ | 1,320,000 | |||||||
| Less | |||||||||||
| Fixed costs | |||||||||||
| Manufacturing overhead | 913,800 | 885,000 | |||||||||
| Marketing | 288,000 | 288,000 | |||||||||
| Administrative | 198,000 | 174,000 | |||||||||
| Total fixed costs | $ | 1,399,800 | $ | 1,347,000 | |||||||
| Operating profits | $ | 116,800 | $ | -27,000 | |||||||
Required:
Prepare a flexible budget for Osage, Inc.(Do not round intermediate calculations.)
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