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 based on Sales revenue Less 112 500 Direct labor 14,998 16,000 10,950 6,512 6,000 15.750 18.000 12.750 7 200 Variable overhead 54,46059700 52.800 Total variable costs Contribution margin 50,390 Flxed costs Manufacturing 5,850 2,388 11,963 6.000 12.000 12.000 Total foxed costs Operating profits 5 30 20130000 $ 22800 20,189 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 based on budgeted 750 Sales Activity Variance Sales revenue 112 500 Variable costs: Direct labor Materials Variable overhead Marketing 15 750 12, 59,700 Total variable costsS Contribution margin 52.800 Fixed costs Total fxed costs Operating profits 30,000 22.800

Explanation / Answer

Workings

Flexible Budget 675 Units Sales Activities Variance Master Budget Sales Revenue 101250 11250 U 112500 Variable Cost Manufacturing Cost Direct Labor 14175 1575 F 15750 Materials 16200 1800 F 18000 Variable Overhead 11475 1275 F 12750 Marketing 6480 720 F 7200 Administrative 5400 600 F 6000 Total Variable Cost 53730 5970 F 59700 Contribution Margin 47520 5280 F 52800 Fixed Cost Manufacturing 6000 0 6000 Marketing 12000 0 12000 Administrative 12000 0 12000 Total Fixed Costs 30000 0 30000 Operating Profit 17520 5280 U 22800

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