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Osage, Inc

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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

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