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: Cream base Natural oils Bottle (8-oz.) Department Mixing Filling Cost Behavior Variable Variable Variable Cost Behavior Variable Variable DIRECT MATERIALS Units per Case 100 ozs. 30 ozs. 12 bottles DIRECT LABOR Time per Case 20 min. 5 25 min. = Cost per Unit $0.02 0.30 0.50 Labor Rate per Hour $18.00 14.40 Direct Materials Cost per Case $2.00 9.00 6.00 $17.00 Direct Labor Cost per Case $6.00 1.20 $7.20 FACTORY OVERHEAD Utilities Facility lease Equipment depreciation Supplies Cost Behavior Materials Inventory: Mixed Fixed Fixed Fixed Estimated finished goods inventory, August 1 Desired finished goods inventory, August 31 Estimated materials inventory, August 1 Total 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: $600 14,000 4,300 660 $19,560 Cases 300 175 Cream Base (ozs.) 250 Cost $12,000 7,000 Oils (ozs.) 290 Bottles (bottles) 600 Estimated materials inventory, August 1 Desired materials inventory, August 31 Genuine Spice Inc. Production Budget For the Month Ended August 31 Cream Base (ozs.) 250 1,000 Cases Oils (ozs.) 290 360 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. Required: 5. Prepare the August production budget. Bottles (bottles) 600 240 6. Prepare the August direct materials purchases budget. Enter the unit price to the nearest cent. Genuine Spice Inc. Direct Materials Purchases Budget For the Month Ended August 31 Natural Oils (ozs.) Cream Base (ozs.) tA SA tA Bottles (bottles) +A +A Total 7. Prepare the August direct labor cost budget. For hours required, round to nearest whole hour. For hourly rate, enter to the nearest cent, if required. Genuine Spice Inc. Direct Labor Cost Budget For the Month Ended August 31 Mixing Hours required for production of: $ Filling Total 8. Prepare the August factory overhead cost budget. If an amount box does not require an entry, leave it blank. Factory overhead: Total Genuine Spice Inc. Factory Overhead Cost Budget For the Month Ended August 31 Variable Fixed Total 9. Prepare the August budgeted income statement, including selling expenses. Genuine Spice Inc. Budgeted Income Statement For the Month Ended August 31 A