Odessa, inc., reports the following information concerning operations for the most recent month:

After reading information on the fundamentals of variance analysis in Chapter 16 of the Fundamentals of Cost Accounting text, complete the problem listed below. This problem will help you apply your knowledge of flexible budgets and manufacturing variances.

Complete the following problem:

· Problem 16-50, "Prepare Flexible Budget," page 655.

16-50. Prepare Flexible Budget

Odessa, Inc., reports the following information concerning operations for the most recent month:

Actual (based on

actual of 540 units)

Master Budget (based

on budgeted 600 units)

Sales revenue

$88,320

$96,000

Less

Manufacturing costs

Direct labor

13,632

14,400

Materials

11,520

13,440

Variable overhead

7,872

9,600

Marketing

5,088

5,760

Administrative

4,800

4,800

Total variable costs

$42,912

$48,000

Contribution margin

$45,408

$48,000

Fixed costs

Manufacturing

4,665

4,800

Marketing

9,984

9,600

Administrative

9,561

9,600

Total fixed costs

$24,210

$24,000

Operating profits

$21,198

$24,000

There are no inventories.

Required

Prepare a flexible budget for Odessa, Inc.

After reading information on activity-based costing and design of a balanced scorecard in Chapter 16 of the Principles of Cost Accounting text, complete the problem listed below. This problem will help you apply your knowledge of activity-based costing techniques for a service-based business, and your knowledge of the application of a balanced scorecard for performance evaluation.

Complete the following problem:

· Problem 16-59, "Manufacturing Variances," page 657.

16-59. Manufacturing Variances

Delta Products prepares its budgets on the basis of standard costs. A responsibility report is prepared monthly showing the differences between master budget and actual results. Variances are analyzed and reported separately. There are no materials inventories.

The following information relates to the current period:

Standard costs (per unit of output)

Direct materials, 6 gallons @ $2.00 per gallon

$12

Direct labor, 3 hours @ $36 per hour

108

Factory overhead

Variable (25% of direct labor cost)

27

Total standard cost per unit

$147

Actual costs and activities for the month follow:

Materials used

15,120 gallons at $1.80 per gallon

Output

2,280 units

Actual labor costs

6,400 hours at $40 per hour

Actual variable overhead

$60,750

Required

Prepare a cost variance analysis for the variable costs.