Chapter 22 Comprehensive Problem #5 eBook 1. COMPPRO.05-01.BLANKS.. Genuine Spice Inc. began operations on January 1 of the current year. The company produces B-ounce bottles of hand and body lotion caled 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 Cirect materials, direct labor, and factory overhead costs are as follows: I e: DIRECT MATERIALS Cost Behavior Units per Case Cost per Unit Cost per Case Crearn base Variable 100 azs. S0.02 $ 2.00 Natural oils Variable 30 OZS. 0.30 9.00 Bottle Baz) Variabile 12 battles 0.50 6.00 $17.00 DIRECT LABOR Department Cost Behavior Time per Case Labor Rate per Hour Cost per Case Mixing Variable 20 min. $18.00 $8.00 Filling Variable 5 14.40 1.20 25 min. $7.20 FACTORY OVERHEAD Cost Behavior Total Cost Utilities Mixed S600 Facility lease Fixed 14.000 Check My Work Progress: 1/1 Items Assignment Score: 0.0% All work saved. Email Instructor Save and Exit Submit Assignment for Grading Chapter 22 Comprehensive Problem #5 eBook FACTORY OVERHEAD 1. COMPPRO.05-01,BLANKS... Cost Behavior Total Cost Utilities Mixed S600 Facility lease Fixed 14.000 Equipment doprociation Fixed 4.300 Supplies Fixed 880 $19,560 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 intormation was gathered from the first six months of operation regarding this cost: Month Case Production Utility Total Cost 500 $600 January February aoo 660 March 1,200 740 $ April 1,100 720 S May 950 690 June 1,025 705 Required-Part A: 1. Deferring the fixed and variable porns of the Willy cost using the high-low refad. Round your perurit cast to two decimal places. 2. Determine the contribution margir per case. Round your answer to tho decimal places. Check My Work Progress: 1/1 items Assignment Score: 0.0% All work saved. Email Instructor Save and Exit Submit Assignment for Grading Chapter 22 Comprehensive Problem #5 eBook 1. COMPPRO.05-01.BLANKS... 2. Determine the contribution margir per case. Round your answer to two decimal places. 3. Deferrine the fixed costs per monit, including the vidly fixed cost from part (1). Refer to the lists of Amount Descriptions for the exact wording of Me answer choices for text entries. les 4. Determine the break-even number of cases per month Part 8-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 S100 per case for August. Inventory planning information is provided as follows: Finished Goods Inventory: Cases Cost 300 $12.000 Estimated finished goods inventory, August 1 Desired finished goods inventory, August 31 175 7,000 Materials Inventory Oils Cream Base (ozs.) (ozs.) 290 Bottles (bottles) 600 250 $ Estimated materials inventory, August 1 Desired materials Inventory, August 31 1,000 380 240 There was negligible woris in process inventory assurned for either the beginning or end of the month; thus, norie was assumeci. In addition, there was no change in the cost per unitor estimated units per case operating data from January Required-Part B: 5 Pronare the drivin het Check My Work Progress: 1/1 Items Assignment Score: 0.0% All work saved. Email Instructor Save and Exit Submit Assignment for Grading Chapter 22 Comprehensive Problem #5 eBook Required-Part B: 1. COMPPRO.05-01.BLANKS... le: 5. Prepare the Auguse production budget.* 6. Prepare the August direct materials purchases budget." 7. Prepare the August Arect 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 doss not require an entry leave it blank (Entries of zero (0) will be cloared avtomatically by CNOW.)* 9. Prepare the August Fudgeted income statement, including selling experises." Erler all arounis ans positive writers. 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 folows: Actual Direct Materials Price per Unit Quantity per Case $0,016 per oz 102 oza. S0.32 per oz. 31 azs. Cream base Natural Oils Bottle (8-oz.) S0.42 per bottle 12.5 bottles $ Actual Direct Labor Rale Actual Direct Labor Time per Case $18.20 19.50 min. Mixing Filling 14.00 5.60 min. Actual variable overhead $305.00 Check My Work Progress: 1/1 items Assignment Score: 0.0% All work saved. Email Instructor Save and Exit Submit Assignment for Grading Chapter 22 Comprehensive Problem #5 eBook Labor Rate Time per Case 1. COMPPRO.05-01.BLANKS... . Mixing S18.20 19.50 min. Filing 14.00 5.60 min. es Actual variable owerhead S305.00 Normal volume 1.600 cases 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. Required-Part C: 10. Determine and interpret the diect materials price and quantily variances for the twee materials. Round your price values for Cream Base to livee decimal places and Natural Oils & Bextiles de la decinal places. 11. Determine and interprer the direct labor rate and time variances for the two departments. Do not round hours. Round your answers to two decimal places.* 12. Delarrive and interpret the factory overhead contrcallable variance. 13. Determine and interprer the factory overhead volume variance. Round rate to four decimal places and round your final answer to nyo decimal places. 14. Why are the standard director and direct materials costs in the calculations tow parts (10) and (11) based on the actual 1,500-case production value rather than the planned 1,250 cases of production used in the budgets for parts (6) and (7)? *Negative amount should be indicated by the minus sign. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Check My Work Progress: 1/1 items Assignment Score: 0.0% All work saved. Email Instructor Save and Exit Submit Assignment for Grading Chapter 22 Comprehensive Problem #5 0 eBook 1. COMPPRO.05-01.BLANKS... 10. Determine and interpret the direct materials price and quantity variances for the three materials. Negative amount should be indicated by the minus sign. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance 83 a positive number. Round your price values for Cream Base totivee decimal pieces and Natural Ows & Bottles to two decinal places. Direct Materials Price Variance Cream Base Natural Oils Bottles Difference IS Direct materials price variance Direct Materials Quantity Variance Cream Base Natural Oils Bottles Difference Direct materials quantity variances The fluctuation in caused the direct material price variances. All the Direct material quantity variances were indicating Check My Work Progress: 1/1 items Assignment Score: 0.0% All work saved. Email Instructor Save and Exit Submit Assignment for Grading Chapter 22 Comprehensive Problem #5 Book The luctuaronn CAUSEO the direct material price variances. All the Direct materia quantity variances were Indicating 1. COMPPRO.05-01.BLANKS.. 11. Determine and interpret the direct labor rate and time variances for the two departments. Negative amount should be indicated by the minus sign. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Do nor round hours. Round your answer to two decimal places. Direct Labor Rate Variance Mixing Department Filing Department Difference Direct labor rate variance Direct Labor Time Variance Mixing Department Filling Department Difference Direct labor time varianco Check My Work Progress: 1/1 items Assignment Score: 0.0% All work saved Email Instructor Save and Exit Submit Assignment for Grading Chapter 22 Comprehensive Problem #5 eBook 1. COMPPRO.05-01.BLANKS.. The change in the caused the labor rate variances. This change have been responsible for the direct labor time variance. 12. Determine and interpret the factory overhead controllable variance. Negative amount should be indicated by the minus sign. Enter a favorable variance as a negative number using a mis sign and an unfavorable vanence as a positive number Factory Overhead Controllable Variance Factory overhead controlable variance $ The factory overhead controllable variance was caused by the variance in 13. Determine and interpret the factory overhead volume variance. Negative amount should be indicated by me minus sign. Enter a favorable variance as a negative number using a Twits Sigr and an unfavorable variance as a positive rewriter. Round rale to four decimal places and resund your firal answer to two decimal places. Factory Overhead Volume Variance Normal volume cases) Actual volumne (cases) Difference Factory overhead volume variance Check My Work Progress: 1/1 items Assignment Score: 0.0% All work saved. Email Instructor Save and Exit Submit Assignment for Grading Chapter 22 Comprehensive Problem #5 eBook Factory overhead controllable variance 1. COMPPRO.05-01.BLANKS. The factory overhead controllable variance was caused by the variance in 13. Determine and interpret the factory overhead volume variance. Negative amount should be indicated by me minus sign. Enter a favorable variance as a negative number using a crus sign and an unfavorable variance as a positive number. Round rale le four decimal places and round your val answer to iwo decimal places. Factory Overhead Volume Variance Normal volume (cases) Actual volume cases) Difference Factory overhead volume variance $ The volume variance indicates the cost of 14. Why are the standard direct later and direct materials costs in the calculations for paris (TO) and (11) Fused on the actual 1,500-case production volume rather than the planned 1,250 cases of production used in the budgers for parts (6) and (7)? The production volume or cases was planned at the beginning of August. The variances compare the actual cost and the standard cost of for the month. Thus, the standard cost must be basexi on the units of actual production Check My Work Progress: 1/1 items Assignment Score: 0.0% All work saved. Email Instructor Save and Exit Submit Assignment for Grading