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 yeac. The company produces 8-ounce bottles of hand and body lotion called Etemal 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 laboc, and factory overhead costs are as follows: DIRECT LABOR The management of Clenuine 5 pice inci. wishes to determine the number of cases reguired to break even per month. The utilites cost, which is part of factory overhead, is a moxed colt. The following information was gathered from the frst sox months of operation regarding this cost: The management of Genuine Spice inc. wishes to determine the number of cases required to break even per month. The utilies 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: 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. 2. Determine the contritution margin per case. Round your answer to the nearest cent. Contribution margin per case $ 3. Determine the foxed costs per month, including the utility fixed cost from part (1). Required: 1. Determine the fixed and variable portions of the utility cost using the high-low method. Round th 2. Determine the contribution margin per case. Round 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). 4. Determine the break-even number of cases per month. cases Note: This section is a continuation from Part A of the comprehensive problem. Be sure you have completed Part A before attempting Part B. You may have to refer back to data presented in Part A and use answers from Part A when completing this section. Genuine Spice Inc. began operations on January 1 of the current year. The company produces 8-ounce botties of hand and body lotion called Eternal Beauty. The fotion 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 foctory overhead costs are as follows: Part B-August Budgets During July of the current year, the management of Genuine Spice Inc. asked the controlier to prepare August manufacturing and income statement budgets, Demand was expected to be 1,500 cases at $100 per cose for August. Inventory planning information is provided as follows: Finished Goods Inventory: Materiais tnventory: 5 moce Check My Wor utes remaining 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. 6. Prepare the August direct materiais purchases budget. Enter the unit price to the nearest cent. 6. Prepare the August direct materials purchases budget. Enter the unit price to the nearest cent. Genuine spice Inc. 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. Print liem Genuine Spice Inc. Direct Labor Cost Budget 8. Prepare the August factory overhead cost budget. If an amount box does not require an entry, leave it blank. 5 more Check My Wook uses remaining. 9. Prepare the August budgeted income statement, including selling expenses. Part CI Note: This section is a continuation from Parts A and B of the comprehensive probiem. Be sure you have completed Parts A and B before attertpting Part C. You may have to refer back to data presented in Parts A and B as well as use answers from those parts when completing this section. Genuine Spice Inc. began operations on January 1 of the current year. The company produces b-ounce bottles of hand and body lotion called Eternal Besuty. The lotion is sold wholesale in 12 -bottle cases for $100 per case. There is a selling commission of $20 per case. The lanuary direct materiais; direct iabor, and factory orerhead costs are as follows: Part C-August Variance Analysis During September of the current year, the controller was asked to perform variance analyses for August. The lanuary operating data provided the standard prices, ratos, 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 follows: 5 more Check My Work uses remaining 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 Moing Department used a higher grade labor classification during the month, thus causing the actual labor rate to exceed standard. The Filing Department used a lawer grade labor dassification during the month, thus causing the actual labor rate to be less than standard. Required: Enter subtracted amounts with minus sign. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. 10. Determine and interpret the direct materials price and quantity variances for the three materiais; Enter the costs in dollars and cents (carried to three decimal places when required). Direct Materials Price Variance: 5 more Check My Wok uses remaining 10. Determine and interpret the direct materials price and quantity variances for the three materials. Enter the costs in dollars and cents (carried to three decimal places when required). Direct Materials Price Variance: Direct Materials Quantity Variance: 11. Determine and interpret the direct labor rate and time variances for the two departments. Do not round hours. Enter the costs in dollars and cents. 5 more Check My Work uses teciaing 11. Determine and interpret the direct labor rate and time variances for the two departments. Do not round hours. Enter the costs in dollars and cents. Direct Labor Rate Variance: Direct Labor Time Variance: 12. Determine and interpret the direct laboe rate and time variances for the two departments 5 more Check My Work uses remaineng 14. The production volume of 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 based on the units of actual production. 5 more Check My Wok ises remaining