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 Cream base Variable 100 oZs. $0.02 Direct Materials Cost per Case $2.00 9.00 6.00 $17.00 Natural oils Variable 30 OZS. 0.30 0.50 Bottle (8-oz.) Variable 12 bottles DIRECT LABOR Department Cost Behavior Time per Case 20 min. Labor Rate Direct Labor p er Hour Cost per Case $18.00 $6.00 14. 401 .20 Mixing Variable Filling Variable 25 min. $7.20 Next > Check My Work 10 more Check My Work uses remaining Bottle (8-oz.) Variable 12 bottles 0.50 6.00 $17.00 DIRECT LABOR Department Cost Behavior Time per Case Labor Rate per Hour Micing Variable 20 min. $18.00 Direct Labor Cost per Case $6.00 1.20 $7.20 Filling Variable 14.40 25 min. FACTORY OVERHEAD Cost Behavior Utilities Mixed Facility lease Fixed Equipment depreciation Fixed Total Cost $600 14,000 4,300 Supplies Fixed 660 $19,560 Part A-Break-Even Analysis Part A-Break-Even Analysis 500 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: Month Case Production Utility Total Cost January $600 February 800 660 March 1,200 740 April 1,100 720 May 950 1,025 705 690 June Required: 1. Determine the foxed 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. 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