Osage, Inc
Subject:AccountingPrice:3.91 Bought6
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) $ 4,970,000 Master Budget (based on budgeted orders for 480,000 units) $4,800,000 Sales revenue Less Variable costs Materials Direct labor Variable overhead Variable marketing and administrative Total variable costs Contribution margin Less Fixed costs Manufacturing overhead Marketing Administrative Total fixed costs Operating profits 1,536,000 227,000 579,500 395,000 $ 2,737,500 $2,232,500 1,536,000 288,000 528,000 408,000 $ 2,760,000 $2,040,000 888,800 277,000 196,000 $1,361,800 $ 870,700 860,000 277,000 172,000 $1,309,000 $ 731,000
Required: Prepare a flexible budget for Osage, Inc. (Do not round intermediate calculations.) OSAGE, INC. Flexible Budget Sales revenue Variable costs: Materials Direct labor Variable overhead Variable marketing and administrative Total variable costs Contribution margin Fixed costs: Manufacturing overhead Marketing Administrative Total fixed costs Operating profit (loss) $ 0 $ 0 $ 0 $ 0
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A flexible budget for Osage.Inc. is as follows:
OSAGGE INC.
Flexible Budget
| $ | |
|---|---|
| Units | 450,000 |
| Sales Revenue ($4,800,000 / 480,000 )*450,000 | 4,500,000 |
| Variable Cost: | |
| Material ($1,536,000 / 480,000 )*450,000 | 1,440,000 |
| Direct Labor ($288,000 / 480,000 )*450,000 | 270,000 |
| Variable Overhead ($528,000 / 480,000 )*450,000 | 495,000 |
| Variable marketing and administrative($408,000 / 480,000 )*450,000 | 382,500 |
| Total Variable Cost | 2,587,500 |
| Contribution Margin | $1,912,500 |
| Manufacturing Overhead | 860,000 |
| Marketing | 277,000 |
| Administrative | 172,000 |
| Total fixed Cost | $1,309,000 |
| Operating Profit (Loss) | $603,500 |
