Comprehensive Problems Part C: Note: This section is a continuation from Parts A and B of the comprehensive problem. Be sure you have completed Parts A and B before attempting 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 8-ounce bottles of hand and body lotion called Eternal Betuty. 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 lobor, and factory overhead costs are as follows: DIRECT MATERIALS Cost Units Behavior per Unit Cost per Case Variable 100 025 $2.00 Natural oils 30 on Bottle (8-0) $17.00 Cost Direct Materials per Case Cream base $0.02 0.30 Variable 9.00 Variable 12 bottles 0.50 6.00 DIRECT LABOR Department Cost Behavior Time per Case Labor Rate per Hour $18.00 Direct Labor Cost per Case $6.00 Variable 20 min Mixing Filling Variable 5 14.40 1:20 DIRECT LABOR Department Cost Behavior Time per Case Labor Rate per Hour Direct Labor Cost per Case Variable 20 min $18.00 Mixing Filling $6.00 Variable 5 14.40 1.20 25 min $7.20 FACTORY OVERHEAD Cost Behavior Total Cost Mixed $600 14,000 Fixed Utilities Facility lease Equipment depreciation Supplies Fixed Fixed 4,300 660 $19,560 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 follows: Actual Direct Materials Actual Direct Materials 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 ae the beginning of the month. Actual data for August were as follows: Actual Direct Materials Actual Direct Materials Price per Unit Quantity per Case Cream base $0.016 per oz. 102 oz. Natural oils $0.32 per or 31 oz. Bottle (8-02.) $0.42 per bottle 12.5 bottles Actual Direct Labor Rate Actual Direct Labor Time per Case Mixing Filling $18.20 14.00 19.50 min 5.60 min Actual variable overhead $305.00 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 Filing Department used a lower Grade labor dassification during the month, thus causing the actual labor rate to be less than standard 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 stane Mixing Department used a higher grade labor cassification during the month, thus causing the actual labor rate to exceed standard. The Filling Department used grade labor classification 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 the direct materials price and quantity variances for the three materials. Enter the costs in dotters and cents (carried to three decimal place when required)
