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 on actual orders for 450,000 units)						Master Budget (based on budgeted orders for 480,000 units)
Sales revenue		$	4,494,000					$	4,320,000
Less
Variable costs
Materials			1,536,000						1,536,000
Direct labor			224,000						288,000
Variable overhead			627,300						576,000
Variable marketing and administrative			372,000						384,000
Total variable costs		$	2,759,300					$	2,784,000
Contribution margin		$	1,734,700					$	1,536,000
Less
Fixed costs
Manufacturing overhead			604,000						575,000
Marketing			190,000						190,000
Administrative			145,500						122,500
Total fixed costs		$	939,500					$	887,500
Operating profits		$	795,200					$	648,500

Required:

Prepare a sales activity variance analysis for Osage, 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.)

Answer 1