Genuine Splon Inc. began operations on January 1 of the current year. The company produces cight-ounce botes of hand and body lotion called Eternal Beauty. The lotion is sold wholesale in 12-bottle cases for $100 per caso. There is a selling commission of S20 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 Cost per Case Cream base Variable 100 OZ $0.02 $2.00 Natural oils Variable 30 OZ 0.30 9.00 Bottie (8-02) Variable 12 bottles 0.50 6.00 $17.00 DIRECT LABOR Department Cost Behavior. Time per Case Labor Rate per Hour Cost per Case DIRECT LABOR Department Cost Behavior Time per Case Labor Rate 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 GH 6.RO Part A-Break-Even Analysis The management of Genuine Spice Inc. wants to determine the number of cases required to break even per month. The ullites cost, which is part of factory overhead, is a mixed cost. The following information was gathered from the first she months of operation regarding this cost: Case Production 500 Utilty Total Cost $600 January February 300 660 March 1.200 740 April 1,100 720 May 950 690 June 1,025 705 Required-Part A: 1. Dotermine the fixed and variable portion of the Unity cost using the high low method 2. Dotermine the contribution margin per case Required-Part A: 1. Determine the fixed and variable portion of the utility cost using the grow method. 2. Determine the contribution mangin percase 3. Dotormine the fixed costs per month, including the unity foxed cost from part (1). 4. Determine the break-even number of casos per month. Part B-August Budgets During July of the current year, the management of Genuine Spice Inc. asked the controller to prepare August manufacturing and income statement budgets. Demand was expected to be 1,500 cases at $100 per case for August. Inventory planning information is provided as follows: Finished Goods Inventory: Cases Cost Estimated finished goods inventory, August 1 300 $12,000 Desired finished goods inventory, August 31 175 7,000 Materials Inventory: Olls Cream Base (oz.) (oz.) 290 Bottles (bottles) 600 250 Estimated materials inventory, August 1 Desired materials inventory, August 31 1,000 360 240 There was negligible work in process inventory assumed for other the beginning or end of the month; thus, none was assumed. In addition, there was no change in the cost per unit or estimated unts per case operating data from January Required-Part B: 5. Prepare the August production budget." 6. Prepare the August direct materials purchases budget 7. Prepare the August direct labor cost budget. Round the hours required for production to the nearest hour. 8. Prepare the August factory overhead cost budget. W an amount box does not require an entry, leave it blank (Entries of zero (O) will be cleared automatically by GNOW)" 9. Prepare the August budgeted income statement, including seling expenses. NOTE: Because you are not required to prepare a cost of goods sold budget, the cost of goods sold calculations will be part of the budgetod income statement "Enter all amounts as positive numbers. Part C-August Variance Analysis During September of the current year, the controller was asked to perform varianco analyses for August. The January operating data provided the standard pricos, ratos, mimos, 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 lata for August were as follows: Actual Direct Materials Price per Unit Quantity per Case $0.016 per or 102 02 Cream base Natural oils S0.32 per oz 31 OZ Bottle (8-Oz.) $0.42 per bottle 12.5 bottles Actual Direct Actual Direct Labor Actual Direct Actual Direct Labor Labor Rate Time per Case Mixing $18.20 19.50 min Filing 14.00 5.60 min $305.00 Actual variable overhead Normal volume 1,800 casos The prices of the materials were different from standard due to fuctuations in market prices. The standard quantty 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 iabot rate to exceed standard. The Filing Department used a lower grade labor classification daring the month, thus causing the actual labor rate to be less than standard Required-Part: 10. Determine and interpret the direct materials price and quantity vanances for the three materials 11. Determine and interpret the direct labor rate and time variances for the two departments. Hound hours to the nearest forth of an hour. 12. Determine and interpret the factory overhead controllable variance. 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 Filing Department used a lower grade labor classification during the month, thus causing the actual labor rate to be less than standard Required-Part: 10. Determine and interpret the direct materials price and quantity variances for the three materials 11. Determine and interpret the direct labor rate and time variances for the two departments. Round hours to the nearest forth of an hour. 12. Determine and interpret the factory overhead controllable variance 13. Determine and interpret the factory overhead volumo variance, 14. Why are the standard direct labor and direct materials costs in the calculations for parts (10) and (11) based on the actual 1,500-case production volume rather than the planned 1,375 cases of production used in the budgets for parts (6) and (7)