Comprehensive Problem 5 Part A: Note: You must complete part A before completing parts B and C 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: DIRECT MATERIALS Cost Behavior Units per Case Cost per Unit Direct Materials Cost per Case $2.00 Cream base Variable 100 os. 30 OZS. $0.02 0.30 Natural oils Variable 9.00 Bottle (8-oz.) Variable 12 bottles 0.50 6.00 $17.00 Department Cost Behavior DIRECT LABOR Time Labor Rate per Case per Hour 20 min $18.00 5 14.40 Direct Labor Cost per Case Variable $6.00 Mixing Filling Variable 1.20 25 min $7.20 FACTORY OVERHEAD Cost Behavior Total Cost Utilities Mixed $600 Facility lease Fixed 14,000 Equipment depreciation Fixed 4,300 Supplies 660 $19,560 Fixed 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 information was gathered from the first six months of operation regarding this cast: Utility Total Month Case Production Cost 500 $600 January February 800 660 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 information was gathered from the first six months of operation regarding this cost: Utility Total Month Case Production Cost 500 $600 January February 800 660 March 1,200 740 April 1,100 720 May 950 690 June 1,025 705 Required: 1. Determine the fixed and variable portions of the utility cost using the high-low method. Round the per unit cost to the nearest cent At the High Point At the Low Point Variable cost per unit Total fixed cost Total cost 2. Determine the contribution margin per case. Enter your answer to the nearest cent. Contribution margin per case $ 3. Determine the fixed costs per month, including the utility fixed cost from part (1). Utilities cost (from part 1) Facility lease Equipment depreciation Supplies Total fixed costs 4. Determine the break-even number of cases per month cases