Part A

$1.$ Determine the fixed and variable portions of the utility cost using the high$-$low method. Round the per unit cost to the nearest cent.

Line Item Description At the High Point At the Low Point

Variable cost per unit $fill in the blank $1$

$0\mathrm{.}20$

$fill in the blank $2$

$0\mathrm{.}20$

Total fixed cost fill in the blank $3$

$500$

fill in the blank $4$

$500$

Total cost fill in the blank $5$

$740$

fill in the blank $6$

$600$

$2.$ Determine the contribution margin per case. Round your answer to the nearest cent.

Contribution margin per case fill in the blank $1$ of $1$$

$55\mathrm{.}60$

$3.$ Determine the fixed costs per month, including the utility fixed cost from part $(1).$

Line Item Description Fixed Costs per Month

Utilities cost $($from part $1)$ $fill in the blank $8$

$500$

Facility lease fill in the blank $9$

$14,000$

Equipment depreciation fill in the blank $10$

$4,300$

Supplies fill in the blank $11$

$660$

Total fixed costs $fill in the blank $12$

$19,460$

$4.$ Determine the break$-$even number of cases per month.

fill in the blank $1$ of $1$$

$350$

cases

Part B

$5.$ Prepare the August production budget.

Genuine Spice Inc.

Production Budget

For the Month Ended August $31$

Line Item Description Cases

Expected cases to be sold

fill in the blank $2$

$1,500$

Desired ending inventory

fill in the blank $4$

$175$

Total units available

fill in the blank $6$

$1,675$

Estimated beginning inventory

fill in the blank $8$

$300$

Total units to be produced

fill in the blank $10$

$1,375$

$6.$ Prepare the August direct materials purchases budget. Enter the unit price to the nearest cent.

Genuine Spice Inc.

Direct Materials Purchases Budget

For the Month Ended August $31$

Line Item Description Cream Base $($ozs$.)$ Natural Oils $($ozs$.)$ Bottles $($bottles$)$ Total

Units required for production

fill in the blank $12$

$137,500$

fill in the blank $13$

$41,250$

fill in the blank $14$

$16,500$

Desired ending inventory

fill in the blank $16$

$1,000$

fill in the blank $17$

$360$

fill in the blank $18$

$240$

Estimated beginning inventory

fill in the blank $20$

$250$

fill in the blank $21$

$290$

fill in the blank $22$

$600$

Direct materials to be purchased

fill in the blank $24$

$138,250$

fill in the blank $25$

$41,320$

fill in the blank $26$

$16,140$

Unit price

$fill in the blank $28$

$0\mathrm{.}02$

$fill in the blank $29$

$0\mathrm{.}30$

$fill in the blank $30$

$0\mathrm{.}50$

Total direct materials to be purchased

$fill in the blank $32$

$2,765$

$fill in the blank $33$

$12,396$

$fill in the blank $34$

$8,070$

$fill in the blank $35$

$23,231$

$7.$ Prepare the August direct labor cost budget. For hours required, round to nearest whole hour. For hourly rate, enter to the nearest cent, if required.

Genuine Spice Inc.

Direct Labor Cost Budget

For the Month Ended August $31$

Line Item Description Mixing Filling Total

Hours required for production of:

Hand and body lotion

fill in the blank $37$

$458$

fill in the blank $38$

$115$

Hourly rate

$fill in the blank $40$

$18$

$fill in the blank $41$

$14\mathrm{.}40$

Total direct labor cost

$fill in the blank $43$

$8,244$

$fill in the blank $44$

$1,656$

$fill in the blank $45$

$9,900$

$8.$ Prepare the August factory overhead cost budget. If an amount box does not require an entry, leave it blank.

Genuine Spice Inc.

Factory Overhead Cost Budget

For the Month Ended August $31$

Line Item Description Fixed Variable Total

Factory overhead:

Utilities

$fill in the blank $47$

$500$

$fill in the blank $48$

$275$

$fill in the blank $49$

$775$

Facility lease

fill in the blank $51$

$14,000$

fill in the blank $52$

$0$

fill in the blank $53$

$14,000$

Equipment depreciation

fill in the blank $55$

$4,300$

fill in the blank $56$

$0$

fill in the blank $57$

$4,300$

Supplies

fill in the blank $59$

$660$

fill in the blank $60$

$0$

fill in the blank $61$

$660$

Total $fill in the blank $62$

$19,460$

$fill in the blank $63$

$275$

$fill in the blank $64$

$19,735$

$9.$ Prepare the August budgeted income statement, including selling expenses.

Genuine Spice Inc.

Budgeted Income Statement

For the Month Ended August $31$

Line Item Description Amount Amount Amount

Sales

$fill in the blank $66$

$150,000$

Finished goods inventory, August $1$

$fill in the blank $68$

$12,000$

Direct materials inventory, August $1$

$fill in the blank $70$

$392$

Direct materials purchases

fill in the blank $72$

$23,231$

Direct materials inventory, August $31$

fill in the blank $74$

$-248$

Cost of direct materials for production

$fill in the blank $76$

$23,375$

Direct labor

fill in the blank $78$

$9,900$

Factory overhead

fill in the blank $80$

$19,735$

fill in the blank $81$

$53,010$

Finished goods inventory, August $31$

fill in the blank $83$

$-7,000$

Cost of goods sold

fill in the blank $85$

$58,010$

Gross profit

$fill in the blank $87$

$91,990$

Selling expenses

fill in the blank $89$

$30,000$

Operating income

$fill in the blank $91$

$61,990$