Question

Odessa, Inc., reports the following information concerning operations for the most recent month: Actual (based on actual of 675 units) $112,340 Master Budget (based on budgeted 750 units) $120.000 Sales revenue Less Manufacturing costs Direct labor Materials Variable overhead Marketing Administrative Total variable costs Contribution margin Fixed costs Manufacturing Marketing Administrative Total fixed costs Operating profits 14,232 16,060 10,980 6,512 6.000 $ 53,784 $S1.556 15,000 18,000 12,750 7. 200 6,000 $ 58,950 $ 61,050 5,360 12,382 11.961 530,203 $ 28,353 6,000 12,000 12,000 $ 30,000 $ 31,050 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. Enter your final answers as a whole number.)

Answer 1

Answer:

ODESSA, INC. Sales Activity Variance Flexible Budget Master Budget (based on actual (based on of 675 Units) Sales Activity Variance | budgeted 750 108,000 12,000 U 120,000 ד ד 1,500 1,800 1,275 720 15,000 18,000 12,750 ד ד 13,500 16,200 11,475 6,480 5,400 53,055 54,945 7,200 600 Sales Revenue Variable Costs: Manufacturing Costs: Direct Labor Materials Variable Overhead Marketing Administrative Total Variable Costs Contribution Margin Fixed Costs: Manufacturing Marketing Administrative Total Fixed Costs Operating Profits ד ד 5,895 6,105 6,000 58,950 61,050 • 6,000 12,000 12,000 30,000 24,945 None None None None 6,000 12,000 12,000 30,000 31,050 6,105

Calculation:
Flexible Budget:
Direct Labor = $15,000 / 750 * 675 = $13,500
Materials = $18,000 / 750 * 675 = $16,200
Variable Overhead = $12,750 / 750 * 675 = $11,475
Marketing = $7,200 / 750 * 675 = $6,480
Administrative = $6,000 / 750 * 675 = $5,400