Odessa, Inc., reports the following information concerning operations for the mo

Question

Odessa, Inc., reports the following information concerning operations for the most recent month Actual (based on actual of 675 units) Master Budget (based on budgeted 750 units) Sales revenue Less 104,850 1.500 Manufacturing costs 14.998 16,000 10,950 6.512 6,000 $54.460 Direct labor Materials Variable overhead 15,750 18,000 12,750 7.200 6,000 ?? 59.700 Administrative Total variable costs Contribution margin 50 39052800 Fixed costs Marketing Administrative ,850 12.388 11,963 6,000 12,000 12,000 3 30 20130,000 Total fxed costs Operating profts 20,189 $ 22,800 There are no inventories Required Prepare a sales activity variance analysis for Odessa, Inc. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, or "U" for unfavorable. If there is no effect, do not select either option.) Sales Activity Variance Flexible Budget (based on actual of 675 units) Master Budget budgeted 750 Sales Activity Variance units) Sales revenue 112,500 Variable costs: Direct labor 15,750 18,000 2,750 7,200 6,000 59,700 52,800 Variable overhead Total variable costs Fored costs 6,000 12,000 2,000 30,000 22,800 Marketing Total fixed costs Operating profits

Explanation / Answer

Solution:

Odessa Inc. Sales Activity Variance Particulars Flexible budget (Basesd on actual of 675 units) Sales Activity Variance Master Budget (Based on budgeted 750 units) Sales revenue $101,250.00 $11,250.00 U $112,500.00 Less: Variable costs: Direct labor $14,175.00 $1,575.00 F $15,750.00 Materials $16,200.00 $1,800.00 F $18,000.00 Variable overhead $11,475.00 $1,275.00 F $12,750.00 Marketing $6,480.00 $720.00 F $7,200.00 Administrative $5,400.00 $600.00 F $6,000.00 Total Variable costs: $53,730.00 $5,970.00 F $59,700.00 Contribution margin $47,520.00 $5,280.00 U $52,800.00 Fixed costs: Manufacturing $6,000.00 $0.00 $6,000.00 Marketing $12,000.00 $0.00 $12,000.00 Administrative $12,000.00 $0.00 $12,000.00 Total fixed costs $30,000.00 $0.00 $30,000.00 Operating profits $17,520.00 $5,280.00 U $22,800.00

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