1 Course Project Overview The Course Project consists of 12 Requirements for you to complete. The Course Project is due at the end of Week 9. See the Modles section for due date information. All of the information you need to complete the Course Project is located in this Workbook. There are thirteen worksheets in the workbook you will need to complete. A list of transactions A Grading Rubric to help explain what is expected. 2 4 Scenario Quivers Inc. began operations on January 1 of the current year. The company produces eight-ounce bottles of jet wax called Ophelia Shine. The wax 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: 5 6 per Case Cream base Natural oils Bottle (8-0) DIRECT MATERIALS Cost Units Behavior Variable OZ Variable 30 oz. Variable Cost per Unit $0.02 0.30 0.50 Direct Materials Cost per Case $ 2.00 9.00 6.00 $17.00 12 bottles Cost Behavior Variable Variable Department Mixing Filling 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 DIRECTLABOR Time per Case 20 min. 5 25 min. Labor Rate per Hour $18.00 14.40 Direct Labor Cost per Case $6.00 1.20 $7.20 FACTORY OVERHEAD Cost Behavior Total Cost Utilities Mixed $ 600 Facility lease Fixed Equipment depreciation Fixed 4,300 Supplies Fixed 660 $19,560 14,000 nr Part A. Break-even Analysis The management of Quivers Inc. wants 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: OWN- 9 10 11 12 13 14 15 16 Month Case Production Utility Total Cost January 500 600.00 February 800 $ 660.00 March 1,200 $ 740.00 April 1.100 $ 720.00 May 950 690.00 June 1,025 705.00 Instructions 1. Determine the fixed and variable portion of the utility cost using the high-low method. 2. Determine the contrinution margin per case. 3. Determine the fixed costs per month, including the utility fixed cost from question (1). 4. Determine the break-even number of cases per month C F G H B 1 REQUIREMENT #1: Determine the fixed and variable portion of the utility cost using the high-low method. 2 High-Low Method Variable Cost Difference Difference in Total Cost per Unit Production 0.20 140 700 in 5 6 Total Cost Variable Cost per Unit $ 0.20 $ 0.20 Units of Product on 1,200 500 Fixed Costs + 8 High Point 9 Low Point 10 11 12 13