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

Products Cost

Behavior Units per Case Cost

per Unit Direct Materials

Cost per Case

Cream base Variable $100$ ozs. $$0\mathrm{.}02$ $$2\mathrm{.}00$

Natural oils Variable $30$ ozs. $0\mathrm{.}309\mathrm{.}00$

Bottle $(8-$oz$.)$ Variable $12$ bottles $0\mathrm{.}506\mathrm{.}00$

Total direct materials cost per case $$17\mathrm{.}00$

DIRECT LABOR

Department Cost

Behavior Time per Case Labor Rate

per Hour Direct Labor

Cost per Case

Mixing Variable $20$ min. $$18\mathrm{.}00$ $$6\mathrm{.}00$

Filling Variable $5$ min. $14\mathrm{.}401\mathrm{.}20$

Total direct labor cost per case $25$ min. $$7\mathrm{.}20$

FACTORY OVERHEAD

Line Item Description Cost Behavior Total Cost

Utilities Mixed $$600$

Facility lease Fixed $14,000$

Equipment depreciation Fixed $4,300$

Supplies Fixed $660$

Total cost $$19,560$

Part A$$Break$-$Even Analysis

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 $500$ $$600$

February $800660$

March $1,200740$

April $1,100720$

May $950690$

June $1,025705$

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.

Line Item Description At the High Point At the Low Point

Variable cost per unit $fill in the blank $1$

$fill in the blank $2$

Total fixed cost fill in the blank $3$

fill in the blank $4$

Total cost fill in the blank $5$

fill in the blank $6$

$2.$ Determine the contribution margin per case. Round your answer to the nearest cent.

Contribution margin per case fill in the blank $1$ of $1$$

$3.$ Determine the fixed costs per month, including the utility fixed cost from part $(1).$

Line Item Description Fixed Costs per Month

Utilities cost $($from part $1)$ $fill in the blank $8$

Facility lease fill in the blank $9$

Equipment depreciation fill in the blank $10$

Supplies fill in the blank $11$

Total fixed costs $fill in the blank $12$

$4.$ Determine the break$-$even number of cases per month.

fill in the blank $1$ of $1$$

cases