odessa Inc. reports the following information concerning operations for the most

Question

odessa Inc. reports the following information concerning operations for the most re Master Budget ased on budgeted tualliased on actual of 540 units) Sales revenue less $100 360 $108,000 Manufacturing costs 14 400 pirect labor Materials Variable overhead Marketing 13 640 11/280 3 450 5 028 4 80o $ 43 198 $ 57 162 13 200 10 /200 5 700 4 800 $ 48 300 S 59 700 ministrative contribution margin Manufacturing Administrative Total variable costs Fixed costs 4.650 9.986 9562 $ 24.198 4.800 9 600 9 600 Marketing Total fixed costs S 24.000 fits $ 32 964 S 35 700 pro

Explanation / Answer

Odessa Inc. Profit Avriance Analysis Actual (540) Manufacturing Variance Marketing and Admin. Variance Sales Price Variance Flexible Budget ( 540 Unit) Sales Activity Variance Master Budget (600 unit) Sales Revenue $100,360 $3,160 F $97,200 -$10,800 UF $108,000 Variable Cost Manufacturing Direct Labour $13,640 -$680 UF $12,960 $1,440 F $14,400 Material $11,280 $600 F $11,880 $1,320 F $13,200 Overhead $8,450 $730 F $9,180 $1,020 F $10,200 Marketing $5,028 $102 F $5,130 $570 F $5,700 Administrative $4,800 -$480 UF $4,320 $480 F $4,800 ToTal Variable Cost $43,198 $650 F -$378 UF $43,470 $4,830 F $48,300 Cntribution Margin $57,162 $650 F -$378 UF $3,160 F $53,730 -$5,970 UF $59,700 Fixed Cost: MAnufacturing $4,650 $150 UF $4,800 $4,800 MArketing $9,986 -$386 UF $9,600 $9,600 Administrative $9,562 $38 F $9,600 $9,600 Total Fixed Cost $24,198 $150 F -$348 UF $24,000 $24,000 Operating Profit $32,964 $150 F -$348 UF $3,160 F $29,730 -$5,970 UF $35,700 Note: Variable Cost calculated for Flexible Budget = Master Budget /Quantity as per master Budget X Actual Quantity

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