*I ONLY NEED QUESTIONS 12 AND 14 ANSWERED PLEASE! 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:
10. Determine and interpret the direct materials price and quantity variances for the three materials. For those boxes in which you must enter subtractive or negative numbers use a minus sign. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Round your price values for Cream Base to three decimal places and Natural Oils & Bottles to two decimal places. Direct Materials Price Variance Cream Base Natural Oils Bottles Actual quantity V $0.200 $0.30 $0.50 Standard price 0.016 0.32 0.42 Difference $0.0040 -$0.02 $0.08 Actual quantity 163,200 OZS. 49,600 OZS 20,000 OZS. Direct materials price variance $652 F -$992 U $1,600 FDIRECT MATERIALS Units per Case Cost per Case Cream base Variable Natural oils ' variable Bottle (84):.) Variable Direct Materials Quantity Variance Cream Base Natural Oils Bottles Actual quantity 160,000 OZS. 48,000 OZS. 19,200 btls. Standard quantity 163,200 OZS. 49,600 OZS. 20,000 btls. Difference -3,200 ozs. -1,600 OZS. -800 btls. Standard price V $0.02 $0.30 $0.50 Direct materials quantity variance -$64 U -$480 U -$400 U The fluctuation in market prices caused the direct material price variances. All the Direct material quantity variances were unfavorable _ indicating some material losses, scrap, and quality rejectionsDIRECT LABOR Department Cost Behavior Tlme per Case Labor Rate per Hour Cost per Case Mixing Valiable 20 min. $18.00 $6.00 Filling Variable 5 14.40 1.20 25 min. $7.20 FACTORY OVERHEAD Cost Behavior Total Cost - Utilities I Mixed - $600 Facility lease I Fixed I 1 4000 Equipment depreciaijen I Fixed I 4.300 Supplies I Fixed - 060 $19,550 11. Determine and interpret the direct labor rate and time variances for the two departments. For those boxes in which you must enter subtractive or negative numbers use a minus sign. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Do not round hours. Round your answers to two decimal places. Direct Labor Rate Variance Mixing Department Filling Department Actual rate $18.20 $14.00 Standard time 18.00 14.40 Difference $0.20 -$0.40 Actual time 487.5 hrs. 140.0 hrs. Direct labor rate variance $97.50 U $56.00 FActual Direct ll-Iaterials Price per Unit Quantity per Case Cream base $0.015 par oz. 102 ozs. Nahual oils $0.32 per oz. 3 1 025. Bottle (802.) $0.42 per bottle 12.5 bottles Actual Direct Actual Direct Labor Lalmr Rate Time per Case Mg $18.20 19.50mjn. Filling 14.00 5.60 min. Actual variable warhead $3 05.90 Normal volume 1,600 cases Direct Labor Tlme Variance Mixing Department Filling Department Actual time T 487.5 hrs. 140.0 hrs. Standard time T 500 hrs. 125 hrs. Difference 12.5 hrs. I 1 5.0 hrs. Standard rate T $18.00 $14.40 Direct labor me variance -$225.00 $216.00 U T I ITI The change in the labor classication '7 caused the labor rate variances. This change COl-Ild 3150 T have been responsible for the direct latnrtime variance. 12. Determine and interpret the factory overhead controllable variance. For those boxes in which you must enter subtractive or negative numbers use a minus sign. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Factory Overhead Controllable Variance $ Factory overhead controllable variance $ The factory overhead controllable variance was caused by the variance in13. Determine and interpret the factory overhead volume variance. For those boxes in which you must enter subtractive or negative numbers use a minus sign. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Round rate to four decimal places and round your final answer to two decimal places. Factory Overhead Volume Variance Normal volume (cases) 1,600 Actual volume (cases) 1500 Difference 100 Fixed factory overhead rate $12. 1625 Factory overhead volume variance $1,216.25 U V The volume variance indicates the cost of underused capacity14. 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)? The production volume of cases was planned at the beginning of August. The variances compare the actual cost and the standard cost of V for the month. Thus, the standard cost must be based on the units of actual production
