Osage, Inc., manufactures and sells lamps. The company produces only when it rec

Question

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 onMaster Budget (based actual orders for 450,000 units) 480,000 units) $4.800,000 Sales revenue Less $4,972.000- Variable costs Materials Direct labor Variable overhead Variable marketing and administrative 1,536,000 224,000 675,700 444,500 1,536,000 288,000 624.000 456,000 Total variable costs Contribution margin Less 2.880 Fixed costs 968,900 285,000 199.000 940.000 285,000 175.000 Marketing Total fixed costs 1,400 Operating profits S 638,900 S 496,000 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)

Explanation / Answer

Flexible budget Sales revenue 4500000 Variable costs: Materials 1440000 Direct labor 270000 Variable overhead 585000 Variable marketing and administrative 427500 Total Variable costs 2722500 Contribution margin 1777500 Fixed costs: Manufacturing overhead 940000 Marketing 285000 Administrative 175000 Total Fixed costs 1400000 Operating profit(loss) 377500

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