Osage, Inc., manufactures and sells lamps. The company produces only when it receives orders and, therefore, has
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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 456,000 units) | Master Budget (based on budgeted orders for 492,000 units) | ||||||||||
Sales revenue | $ | 4,974,000 | $ | 4,920,000 | |||||||
Less | |||||||||||
Variable costs | |||||||||||
Materials | 1,470,000 | 1,476,000 | |||||||||
Direct labor | 282,000 | 344,400 | |||||||||
Variable overhead | 675,000 | 639,600 | |||||||||
Variable marketing and administrative | 480,000 | 492,000 | |||||||||
Total variable costs | $ | 2,907,000 | $ | 2,952,000 | |||||||
Contribution margin | $ | 2,067,000 | $ | 1,968,000 | |||||||
Less | |||||||||||
Fixed costs | |||||||||||
Manufacturing overhead | 990,000 | 960,600 | |||||||||
Marketing | 294,000 | 288,600 | |||||||||
Administrative | 210,000 | 180,600 | |||||||||
Total fixed costs | $ | 1,494,000 | $ | 1,429,800 | |||||||
Operating profits | $ | 573,000 | $ | 538,200 | |||||||
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Related Book For
Fundamentals of Cost Accounting
ISBN: 978-1259565403
5th edition
Authors: William Lanen, Shannon Anderson, Michael Maher
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