Reference no: EM132783944
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
|
$4,493,000
|
$4,320,000
|
|
Less
|
|
|
|
Variable costs
|
|
|
|
Materials
|
1,536,000
|
1,536,000
|
|
Direct labor
|
267,800
|
336,000
|
|
Variable overhead
|
530,300
|
480,000
|
|
Variable marketing and administrative
|
421,500
|
432,000
|
|
Total variable costs
|
$2,754,800
|
$2,784,000
|
|
Contribution margin
|
$1 738 200
|
$1,536,000
|
|
Less
|
|
|
|
Fixed costs
|
|
|
|
Manufacturing overhead
|
974,000
|
945,000
|
|
Marketing
|
278,000
|
278,000
|
|
Administrative
|
198,000
|
176,000
|
|
Total fixed costs
|
$1,450,800
|
$1,399,000
|
|
Operating profits
|
$ 288,200
|
$ 137,000
|
problem 1: Create a flexible budget for Osage Inc.