Instructions Amount Descriptions Questions (Part A) Production Budget Budgeted Income Statement Variance Analysis (Part C) Direct Materials Purchases Budget Direct Labor Cost Budget Factory Overhead Cost Budget Instructions une spice Inc began operations on January 1 of the current year. The company produces aight pun January direct materials, direct labor, and factory overhead costs are as follows: bois ot hart and bestu la calor Eternal Beauty The lotion is sold wholesale in 12 bottle cases for $100 per case. There is a selling commission Stor sanner case There is a selling commission of $20 per case. The DIRECT MATERIALS Cost Behavior Units per Case Cost per Unit Cost per Case Cream base Variable 100 oz $0.02 $ 200 Natural oils Variable 30 oz. 0130 9.00 Bottle (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 Mixing Variable 20 min Filling Variable 25 min FACTORY OVERHEAD Cost Behavior Total Cost Utilities Mixed $500 Facility lease Fixed 14,000 Equipment depreciation Fixed 4,300 Fbed 660 Supplies $19,560 Activate Windows 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 utilities cost, which is part of factory overhead, is a mixed cost. The following information was gone 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 Case Production 500 January Utility Total Cost $600 660 740 February 800 March 1,200 April 1,100 720 May 950 690 705 June 1,025 Required-Part A: Determine the fixed and variable portion of the utility cost using the high-ow method 2. Determine the contribution margin per case. 3. Determine the fixed costs per month, including the utility fixed cost from part (1). 4. Determine the break-even number of cases per month Part B - August Budgets Uuring July of the current year, the management of Genuine Spice Inc. asked the controller to prepare August manufacturing and income statement budgets. Demand was exPEL follows: ulacturing and income statement budgets. Demand was expected to be 1,500 cases at $100 per case for August. Inventory planning information is provided as Finished Goods Inventory: Cases Cost $12,000 Estimated finished goods inventory, August 1 Desired finished goods inventory, August 31 300 1 75 7,000 Materials Inventory: Cream Base (oz.) Oils (oz.) 290 360 Bottles (bottles) 600 240 Estimated materials inventory, August 1 250 Desired materials inventory, August 31 1,000 There was negligible work in process inventory assumed for either the beginning or end of the month; thus, none was assumed. In addition, there was no change in the cost per unit or estimated units per case operating data from January Required-Part B: 5. Prepare the August production budget * 6. Prepare the August direct matenals 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. If an amount box does not require an entry, leave it blank. (Entries of zero (0) will be cleared automatically by CNOW)* 9. Prepare the August budgeted income statement, including selling 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 budgeted income statement * *Enter all amounts as positive numbers. on the actual 1500-case production volume rather than the planned 1375 cases of production used in the budgers for parts (6) and 7 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 11375 cases of proda G etings eck My Work 2 more Check My Work uses remaining. Email Instructor Save and Exit