August Budgets

Instructions Genuine Spice Inc. began operations on January 1 of the current year. The company produces eight-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 DIRECT MATERIALS Units per Case 100 oz. 30 oz 12 bottles Cost per Unit S0.02 0.30 0.50 Cost per Case 2.00 9.00 6.00 $17.00 Cost Behavior Cream base Variable Natural oils Variable Bottle (8-oz.) Variable Instructions 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 CasesCost Estimated finished goods inventory, August 1 Desired finished goods inventory, August 31 300 $12.000 1757.000 Materials Inventory Cream Base Oils Bottles (oz.) 250 Desired materials inventory, August 311,000 (oz.) (bottles) 290 360 Estimated materials inventory, August 1 600 240 Instructions 250 290 600 Estimated materials inventory, August 1 Desired materials inventory, August 31 1000 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-Part B: 5. Prepare the August production budget 6. Prepare the August direct materials purchases budget 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 If an amount box does not require an entry leave it blank. (Entries of zero (0) will be cleared automatically by CNOW)" 9 Prepare the August budgeted income statement, including selling expenses NOTE. Because you are not required to prepare a cost of goods sold budget, the cost of goods sold calculations will be part of the budgeted income statement Enter all amounts as positive numbers