Instructions Genuine Spice Inc. began operations on January 1 of the current year. The company produces eight ounce bottles of hand and body lotion called Bernal Beauty The lotion is sold wholesale in 12-bottle cases for $100 per case. There is a seling commission of $20 per case. The January direct materins, 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 10002 5002 5200 0.50 900 Botte (6 ) Vibe 12 bote 0.50 6.00 $1700 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 14.40 1.20 25 min $7.20 FACTORY OVERHEAD Cost Behavior Total Cost Ulities Mixed $600 Faciltse lease Fixed 14.00 CLONS Equipment depreciation Fixed 4,300 Supplies Foed 660 $19,560 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 utites 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: Utility Total Cost 3600 January February Case Production 500 800 1200 -660 March 740 April 1.100 950 1,025 June 705 Required Part A: 1. Determine the fixed and variable portion of the utility cost using the bishow method 2. Determine the contribution mersin per case. 3. Determine the fixed costs per month, including the ability fixed cost from part(1). 4. Determine the break-even number of cases per month Part B-August Budgets During July of the current year, the management of Genuine Spice no asked the controller to prepare August manufacturing and income statement budgets Demand was expected to be CALERO A Instructions Finished Goods Inventory. Estimated finished goods inventory, August 1 Desired finished goods inventory, August 31 Cases 300 175 Cost $12,000 7,000 Materials Inventory Cream Base (oz.) 250 1,000 Oils (oz.) 290 Bottles (bottles) 600 240 Estimated materials inventory, August 1 Desired materials invertory, August 31 structions here was negligible work in process inventory assumed for either the beginning or end of the month, thus, none was assumed hadition, there was no change in the cost per unitor stimated units 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 an amount box does not require an entry leave blank (Entries of tero() will be cleared automatically by CNOW) 9. Prepare the August budgeted income statement including selling expenses. NOTE Because you are not regard 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 Instructions During September of the current year, the controler was asked to perform variance analyses for August The Jouy corting data provided the price rates, tines, and quarties per case. There were 1.500 actul care produced during August, which was 250 more cases than planned at the beginning of the north Actual dets for August were at to ows Create Nursos Bote (8 Actual Direct Materials Price per Unit Quantity per Case 30016 per 102 02 50.32 per oz. 3102 $0.42 per bottle 125 bottes ) Actual Direct Labor Rate 1820 Actual Direct Labor Time per Case 1950 min Meng Instructions Filing 14:00 5660 min Actual vriable overhead Normal volume $305.00 1,600 cases The prices of the materials were different from standard due to tuctutions in prices. The sind Quartty of materials used percase was an ideal standard. The Mang Department used a higher rade labor classification during the month, thus causing the actus loborrate to exceed standard. The Filing Department used a lower grade labor classification during the month, thus causing the actual labor role to be less than standard Required-Part 10. Determine and interpret the direct materials price and gently variances for the three materials 11 Determine and interpret the direct labor rate and time variances for the ho departments Roundhours to the nearest tents of an hour 12. Determine and interpret the factory overhead controlable variance 13. Determine andere the factory. c o m Required-Part C: 10. Determine and interpret the direct materials price and quantity variances for the three materiais. 11. Determine and interpret the direct labor rate and time variances for the two departments. Round nours to the nearest tenth of an hour. 12. Determine and interpret the factory overhead controllable variance. 13. Determine and interpret the factory overhead volume variance 14. Why are the standard direct Sabor 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)