5. Prepare the August production budget. 6. Prepare the August direct materials purchases budget. Answer 7. Prepare the August direct labor cost budget. Round the hours required for production to the nearest hour. 8. Prepare the August factory overhead cost budget. 9. Prepare the August budgeted income statement, including selling expenses. 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: Cream base Natural oils Bottle (8-oz.) Actual Direct Materials Price per Unit $0.016 per oz. $0.32 per oz. $0.42 per bottle Actual Direct Materials Quantity per Case 102 oz. 31 oz 12.5 bottles Actual Direct Labor Rate $18.20 Actual Direct Labor Time per Case 19.50 min. 5.60 min. Mixing Filling 14.00 Actual variable overhead Normal volume $305.00 1,600 cases The prices of the materials were different from 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. Instructions 10. Determine and interpret the direct materials price and quantity variances for the three materials. 11. Determine and interpret the direct labor rate and time variances for the two departments. Round hours to the nearest hour. 11. Mixing time variance, $(225) F Answer + Check Figure: Mixing time variance, $(225) F 12. Determine and interpret the factory overhead controllable variance. Answer Check Figure: $5 U 13. Determine and interpret the factory overhead volume variance. 14. Why are the standard direct labor and direct materials costs in the calculations for parts (10) and (11) based on the actual 1,500-case production volume rather than the planned 1,375 cases of production used in the budgets for parts (6) and (7)? 5. Prepare the August production budget. 6. Prepare the August direct materials purchases budget. Answer 7. Prepare the August direct labor cost budget. Round the hours required for production to the nearest hour. 8. Prepare the August factory overhead cost budget. 9. Prepare the August budgeted income statement, including selling expenses. 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: Cream base Natural oils Bottle (8-oz.) Actual Direct Materials Price per Unit $0.016 per oz. $0.32 per oz. $0.42 per bottle Actual Direct Materials Quantity per Case 102 oz. 31 oz 12.5 bottles Actual Direct Labor Rate $18.20 Actual Direct Labor Time per Case 19.50 min. 5.60 min. Mixing Filling 14.00 Actual variable overhead Normal volume $305.00 1,600 cases The prices of the materials were different from 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. Instructions 10. Determine and interpret the direct materials price and quantity variances for the three materials. 11. Determine and interpret the direct labor rate and time variances for the two departments. Round hours to the nearest hour. 11. Mixing time variance, $(225) F Answer + Check Figure: Mixing time variance, $(225) F 12. Determine and interpret the factory overhead controllable variance. Answer Check Figure: $5 U 13. Determine and interpret the factory overhead volume variance. 14. Why are the standard direct labor and direct materials costs in the calculations for parts (10) and (11) based on the actual 1,500-case production volume rather than the planned 1,375 cases of production used in the budgets for parts (6) and (7)