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:

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:

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.

QUESTIONS:

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DIRECT MATERIALS Cost Units Cost Direct Materials Behavior per Case per Unit 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 Cost Time Labor Rate Direct Labor Department Behavior per Case per Hour 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 Actual Direct Materials Actual Direct Materials Price per Unit 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 Actual Direct Labor Rate 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 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 on positive numri Direct Materials Price Variance: Cream Base Natural Oils Bottles Actual price $ Standard price Ditierence Actual quantity (units) O Oz. Direct material price variance $ Indicate it favorable or unfavorable Enter the standard price to two decimal places. Direct Materials Quantity Variance: Cream Base Natural Oil Bottles bos Actual quantity Standard quantity F OZ Difference Standard pri Direct materials quantity valance Indicate it lavorable or unfavorable indicating The flutuation in caused the direct material price variances. All the quantity variances were 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. Direct Labor Rate Variance: Mixing Department Filling Department Actual rate Standard rate Difference $ s Actual time (hours) X Direct labor rate variance $ Indicate if favorable or unfavorable Direct Labor Time Variance: Mixing Department Filling Department Actual time Chours) Standard time hours) Difference XS Standard rate S Direct labor time variance Indicate favorable or unfavorable have been responsible for the direct labor time variance The change in the caused the labor rate variances. This change 12. Determine and interpret the factory berhend controllable variante. Enter all anaunts as positive ankers Actual variable overhead Variable overhead at standard Factory overhead alla viance indicate if favorable or unfavorable The factory overhead controllable variance was caused by the va acei 13. Determine and interpelle actory overtiead volume variance. When determining the fixed Factory overhead res, de la cory owerhead rate to two decimal places and the factory overhead volume variance to wholes, and Normal vol cases Artual volume (cases) Site Tixed factory overhead rate Factory at head volum variance $ Indicate it favurable or unfavorable The volume variance indicates the cost of 14. Why are the standard direct labor and direct materiale costs in the cataladous for parts and (1) based on the actual 1,500 case production volume rather than the planned 1,335 cases of product used in the button