Hello after doing some further work I was hoping I could get

Hello, after doing some further work, I was hoping I could get further assistance and direction. Anything would help, thank you!

Genuine Spice Inc. began operations on January 1 of the current year. The company produces 8-ounce bottles of hand and body lotion called Eternal Beauty. The lotion is sold wholesale in 12-bottle cases for $100 per case. There is a selling commission of $20 per case. The January direct materials, direct labor, and factory overhead costs are as follows:

Part A—Break-Even Analysis

The management of Genuine Spice Inc. wishes to determine the number of cases required to break even per month. The utilities cost, which is part of factory overhead, is a mixed cost. The following information was gathered from the first six months of operation regarding this cost:

Part B—August Budgets

During July of the current year, the management of Genuine Spice Inc. asked the controller to prepare August manufacturing and income statement budgets. Demand was expected to be 1,500 cases at $100 per case for August. Inventory planning information is provided as follows:

Finished Goods Inventory:

Materials Inventory:

There was negligible work in process inventory assumed for either the beginning or end of the month; thus, none was assumed. In addition, there was no change in the cost per unit or estimated units per case operating data from January.

Part C—August Variance Analysis

During September of the current year, the controller was asked to perform variance analyses for August. The January operating data provided the standard prices, rates, times, and quantities per case. There were 1,500 actual cases produced during August, which was 250 more cases than planned at the beginning of the month. Actual data for August were as follows:

Actual Direct Materials

The prices of the materials were different than standard due to fluctuations in market prices. The standard quantity of materials used per case was an ideal standard. The Mixing Department used a higher grade labor classification during the month, thus causing the actual labor rate to exceed standard. The Filling Department used a lower grade labor classification during the month, thus causing the actual labor rate to be less than standard.

DIRECT MATERIALS
	Cost Behavior	Units per Case	Cost per Unit	Cost per Case
Cream base	Variable	100 ozs.	$0.02	$ 2.00
Natural oils	Variable	30 ozs.	0.30	9.00
Bottle (8-oz.)	Variable	12 bottles	0.50	6.00
				$17.00

Questions Part A) Production Budget Direct Materials Purchases Dudget Direct Labor Cost Budget Factory Overhead Cost Budget Dudgeted Income Stalement Direct Materials Prches Budget Budgeled Income Etacement Preduetien Budyst Crearn Base os Feedoack re Labor Cost B dget Total disct labor cout

Solution

Please hit LIKE button if this helped. For any further explanation, please put your query in comment, will get back to you. 1 Determine the fixed and variable portions of the utility cost using the high-low method. Round your per unit cost to two decimal places. Case Cost Low 500 600 High 1200 740 Difference 700 140 Variable Cost 140/700 0.2 Fixed Cost 600-(500*0.2) 500 2 Contribution Margin per Case Selling Price per case 100 Less: Variable Cost Direct Material 17 Direct Labor 7.2 Variable Overhead-Utilities 0.2 Selling Commission 20 Total Variable Cost 44.4 Contriution Margin per Case 55.6 3 Fixed Cost per month Utilities 500 Facility Lease 14000 Equipment Depreciation 4300 Supplies 660 Total Fixed Cost 19460 4 Break Even No of Cases Fixed Cost/Contribution Margin per case 19460/55.6 350 5 Production Budget Expected units to be sold 1500 add: desired ending inventory 175 Total Units available for sale 1675 Less: Beginning invenory -300 Production Needed 1375 6 Direct Material Purchase Budget Cream Base Natural Oils Bottle Total Production Needed 1375 1375 1375 Units needed per case 100 30 12 Total Material Needed for production 137500 41250 16500 add: desired ending inventory 1000 360 240 Total Units available for usage 138500 41610 16740 Less: Beginning invenory -250 -290 -600 Total Purchases to be made 138250 41320 16140 Per Unit Purchase Price 0.02 0.3 0.5 Total Purchases in $ 2765 12396 8070 23231 7 Direct Labor Budget Mixing Filling Total Production Needed 1375 1375 Hours needed per case 0.3 0.1 Total Hour Required 458 115 Per Hour Cost 18 14.4 Total Labor Cost 8250 1650 9900 8 Factory Overhead Budget Fixed Variable Total Utilities 500 100 600 Facility Lease 14000 14000 Equipment Depreciation 4300 4300 Supplies 660 660 Total 19560 9 Income Statement Sale 1500*100 150000 Finished goods inventory, Beg 12000 Working for Direct Material Beginning Inventory Direct materials: Cream Base Natural Oils Bottle Total Direct materials inventory, Beg 392 250 290 600 Direct materials purchases 23231 0.02 0.30 0.50 Cost of direct materials available for use 23623 5 87 300 392 Direct materials inventory, End -218 Working for Direct Material Endinging Inventory Cost of direct materials placed in production 23405 Cream Base Natural Oils Bottle Total Direct labor 9900 1000 260 240 Factory overhead 19560 0.02 0.3 0.5 20 78 120 218 Total manufacturing costs 52865 Cost of goods manufactured 52865 Cost of finished goods available for sale 64865 Finished goods inventory, End -7000 Cost of goods sold 57865 Gross Profit 92135 Less: Selling Expense (1500*20) 30000 Income before Income Tax 62135