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Genuine Spice Inc. began operations on January 1, 2016. The company produces a hand and body lotion in an eight-ounce bottle called Eternal Beauty .

Genuine Spice Inc. began operations on January 1, 2016. The company produces a hand and body lotion in an eight-ounce bottle 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
Cream base Variable 100 ozs. $0.02 $2.00
Natural oils Variable 30 ozs. 0.30 9.00
Bottle (8-oz.) Variable 12 bottles 0.50 6.00
$17.00
DIRECT LABOR
Department Cost Behavior Time per Case Labor Rate per Hour Direct Labor Cost per Case
Mixing Variable 20 min. $18.00 $6.00
Filling Variable 5 14.40 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 Fixed 660
$19,560

Part CAugust 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 Price per Unit Actual Direct Materials Quantity per Case
Cream base $0.016 per oz. 102 ozs.
Natural oils $0.32 per oz. 31 ozs.
Bottle (8-oz.) $0.42 per bottle 12.5 bottles

Actual Direct Labor Rate Actual Direct Labor Time per Case
Mixing $18.20 19.50 min.
Filling 14.00 5.60 min.
Actual variable overhead $305.00
Normal volume 1,600 cases

Determine and interpret the factory overhead controllable variance. Enter all amounts as positive numbers.

Actual variable overhead $
Variable overhead at standard cost
Factory overhead controllable variance $
Indicate if favorable or unfavorable

13. Determine and interpret the factory overhead volume variance. When determining the fixed factory overhead rate. Round the factory overhead rate to two decimal places and and the factory overhead volume variance to whole dollars. Enter all amounts as positive numbers.

Normal volume (cases)
Actual volume (cases)
Difference
Fixed factory overhead rate $
Factory overhead volume variance $
Indicate if favorable or unfavorable

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