Part BAugust 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, 2016	300	$12,000
Desired finished goods inventory, August 31, 2016	175	7,000

Materials Inventory:

	Cream Base	Oils	Bottles
	(ozs.)	(ozs.)	(bottles)
Estimated materials inventory, August 1, 2016	250	290	600
Desired materials inventory, August 31, 2016	1,000	360	240

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 materials purchases budget.*

7.

Prepare the August direct labor budget. Round the hours required for production to the nearest hour.*

8.

Prepare the August factory overhead 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.

Genuine Spice Inc. began operations on January 1, 2016. The company produces eight-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: Prepare the August direct materials purchases budget. Enter all amounts as positive numbers. Proper a the August production budget Enter all amounts as positive numbers Prepare the August direct labor budget Round the hours required for production to the nearest hour Enter all amounts as positive numbers Propara the August factory overhead budget. Enter all amounts as positive numbers If an amount box does net require an entry, leave it blank. (Entries of zero (0) will be cleared automatically by CHOW.)