Genuine Spice Inc began operations on January 1 of the current year The company produces eight 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 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 The prices of the materials were different from 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 Filling Department used a lower grade labor classification during the month, thus causing the actual labor rate to be less than standard 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) Enter all amounts as positive numbers 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 Enter all amounts as positive numbers 12 Determine and interpret the factory overhead controllable variance Enter all amounts as positive numbers 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 the factory overhead volume variance to whole dollars Enter all amounts as positive numbers

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Genuine Spice Inc. began operations on January 1 of the current year. The company produces eight- ounce bottles of hand and body lotion called Eternal

Genuine Spice Inc. began operations on January 1 of the current year. The company produces eight- 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
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

The prices of the materials were different from 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 Filling Department used a lower grade labor classification during the month, thus causing the actual labor rate to be less than standard.

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). Enter all amounts as positive numbers.

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. Enter all amounts as positive numbers.

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

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 the factory overhead volume variance to whole dollars. Enter all amounts as positive numbers.