Question

4 Odessa, Inc., reports the following information concerning operations for the most recent month Master Budget 14.28 Actual (based on actual of 540 units) $ 88,320 (based on points budgeted 6e0 units) $ 96,e00 Sales revenue Less Manufacturing costs eBook Direct labor 13,632 11,520 14,400 13,440 Materials References Variable overhead 7,872 9,60e Marketing Administrative 5,088 4,88e 5,768 4,8e8 Total variable $ 42,912 $ 48,eee costs $ 45,408 Contribution margin Fixed costs Manufacturing Marketing Administrative 48,e00 4,800 9,600 4,665 9,984 9,561 9,600 24,210 Total fixed costs 24,008 24,000 $ 21,198 Operating profits There are no inventories. Required: Prepare a profit variance analysis for Odessa, Inc. (Do not round intermediate calculations. Indicate the effect of each variance by Prepare a profit 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.) ODESSA, Inc. Profit Variance Analysis Marketing and Administrative Variance Flexible Master Budget (600 Units) Actual (540 Units) Manufacturing Variance Sales Activity Variance Sales Price Variance Budget (Units) Sales revenue 86.400S 9,600 U 88,320 96.000 Variable costs Manufacturing oosts 12.960 1,440F 14.400 Direct labor 13,632 12,096 1,344F 13.440 Materials 11,520 960 F 7,872 8,640 9.600 Overhead 576F 5,184 5,760 5,088 Marketing 4,800 480 F 4,320 4,800 Administrative 43,200 4,800 U 48.000 S Contribution margin S 45,408 Fixed costs 4,800 4,800 4,665 Manufacturing 9.600 9600 9,984 Marketing of 9,600 9,600 Administrative 9.561 4,800 U 24,000 19,200 S s 21,198 Operating profits

Answer 1

ODESSA, INC.
Profit Variance Analysis
	Actual (540 Units)	Manufacturing Variance		Marketing and Administrative Variance		Sales Price Variance		Flexible Budget (540 Units)	Sales Activity Variance		Master Budget (600 Units)
Sales revenue	88320					1920	F	86400	9600	U	96000
Variable costs:
Manufacturing
Direct labor	13632	672	U					12960	1440	F	14400
Materials	11520	576	F					12096	1344	F	13440
Overhead	7872	768	F					8640	960	F	9600
Marketing	5088			96	F			5184	576	F	5760
Administrative	4800			480	U			4320	480	F	4800
Contribution margin	45408	672	F	384	U	1920	F	43200	4800	U	48000
Fixed costs:
Manufacturing	4665	135	F					4800	0		4800
Marketing	9984			384	U			9600	0		9600
Administrative	9561			39	F			9600	0		9600
Operating profit	21198	807	F	729	U	1920	F	19200	4800	U	24000