PLEASE NOTE: I WILL BE PROVIDING ALL OF THE WORK THAT I HAVE DONE; I ONLY NEED HELP WITH WHAT IS IN RED FOR:
- FACTORY OVERHEAD COST BUDGET (#8)
- VARIANCE ANALYSIS (#10, #11, FIXED FACTORY OVERHEAD RATE IN #13)
I desperately need help with this, as I am out of attempts at checking my work and my professor hasn't been responding to my emails for days, and it is due tomorrow. I am growing desperate and am out of options; please help me with those I mentioned above!
HELP!
Part B-August 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: Estimated finished goods inventory, August 1 Desired finished goods inventory, August 31 Cases 300 175 Cost $12,000 ,000 7 Materials Inventory: Estimated materials inventory, August 1 Desired materials inventory, August 31 Cream Base (oz.) 250 1 ,000 Oils (oz.) 290 360 Bottles (bottles) 600 240 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 During September of the current year, the controller was asked to perform variance analyses for August. The January operating data provided the standard prices, rates, times, and quantities per case. There were 1,500 actual cases produced during August, which was 250 more cases than planned at the beginning of the month. Actual data for August were as follows: Cream base Natural oils Bottle (8-oz.) Actual Direct Materials Price per Unit Quantity per Case $0.016 per oz. 102 oz. $0.32 per oz. 31 oz. $0.42 per bottle 12.5 bottles Actual Direct Labor Rate $18.20 14.00 Actual Direct Labor Time per Case 19.50 min 5.60 min. Mixing Filling Actual variable overhead $305.00 Normal volume 1,600 cases The prices of the materials were different from standard due to fluctuations in market prices. The standard quantity of materials used per case was an ideal standard. The Mixing Department used a higher grade labor classification during the month, thus causing the actual labor rate to exceed standard. The Filling Department used a lower grade labor classification during the month, thus causing the actual labor rate to be less than standard 1. Determine the fixed and variable portion of the utility cost using the high-low method. At Low Point Variable cost per unit Total fixed cost At High Point $0.20 V $500.00 $740.00 $0.20 V $500.00 Total cost $600.00 Feedback Check My Work 1. Divide the difference between the highest and lowest total costs by the difference between the highest and lowest production units. 2. Determine the contribution margin per case. $55.60 Feedback Check My Work 2. Sales minus variable costs equals contribution margin. 3. Determine the fixed costs per month, including the utility fixed cost from part (1) Total fixed costs: Utilities Facility lease $500.00 14,000.00 4,300.00 660.00 Equipment depreciation Supplies $19,460.00 4. Determine the break-even number of cases per month. 350 cases Feedback Production Budget 5. Prepare the August production budget. Enter all amounts as positive numbers. Genuine Spice Inc. Production Budget For the Month Ended August 31 Cases Expected cases to be sold 1,500 Plus desired ending inventory 175 V Total cases required 1,675 Less estimated beginning inventory 300 Total cases to be produced 1,375 Points: 9/9 Feedback 6. Prepare the August direct materials purchases budget. Enter all amounts as positive numbers. Genuine Spice Inc. Direct Materials Purchases Budget For the Month Ended August 31 Cream Base (oz.) Natural Oils (oz.) Bottles (bottles) Total Units required for production 137,500 41,250 16,500 Plus desired ending inventory 1,000 360 240 V 600 Less estimated beginning inventory 250 290 Direct materials to be purchased 138,250 41,320 V 16,140 V X Unit price $0.02 $0.30 $0.50 Total direct materials to be purchased $2,765 V $12,396 $8,070 $23,231 Direct Labor Cost Budget 7. Prepare the August direct labor cost budget. Round the hours required for production to the nearest hour. Enter all amounts as positive numbers. Genuine Spice Inc. Direct Labor Cost Budget For the Month Ended August 31 Mixing Filling Total Hours required for production of hand and body lotion 458 115 X Hourly rate $18.00 $14.40 Total direct labor cost $8,244 $1,656 $9,900 Points: 10/10 Feedback 8. Prepare the August factory overhead cost budget. Enter all amounts as positive numbers. 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 Fixed Variable Total Factory overhead: Utilities $275 X $500 X $775 Facility lease 14,000 X 14,000 Equipment depreciation 4,300 4,300 X 660 X Supplies 660 Total $19,460 X $19,735 9. Prepare the August budgeted income statement, including selling expenses. Enter all amounts as positive numbers. NOTE: Because you are not required Genuine Spice Inc. Budgeted Income Statement For the Month Ended August 31 Revenue from sales $150,000 Finished goods inventory, August 1 $12,000 Direct materials: Direct materials inventory, August 1 $392 Direct materials purchases 23,231 Cost of direct materials available for use $23,623 248 Less direct materials inventory, August 31 Cost of direct materials placed in production $23,375 Direct labor 9,900 Factory overhead 19,735 Cost of goods manufactured 53,010 V Cost of finished goods available for sale 65,010 Less finished goods inventory, August 31 7,000 V Cost of goods sold 58,010 Gross profit $91,990 Selling expenses 30,000 Income before income tax $61,990 10. Determine and interpret the direct materials price and quantity variances for the three materials. Enter a favorable variance as a negative amount, and an unfavorable variance as a positive amount. Direct Materials Price Variance Cream Base Natural Oils Bottles Actual price $0.32 $0.42 $0.016 0.020 Standard price 0.30 0.50 Difference $0.0040 X $0.02 $0.08 X X Actual quantity 153,000 oz. 46,500 18,750 V Direct materials price variance $612 X $930 u $1,500 X Direct Materials Quantity Variance Cream Base Natural Oils Bottles Actual quantity 153.000 oz. 46,500 Oz 18,750 btls. Standard quantity 150,000 45,000 18,000 Difference 3,000 oz. 1,500 o 750 V btls. X Standard price $0.02 $0.30 $0.50 Direct materials quantity variance $60 V UV $450 $375 11. Determine and interpret the direct labor rate and time variances for the two departments. Round hours to the nearest tenth of an hour. Enter a Direct Labor Rate Variance Mixing Department Filling Department Actual rate $18.20 $14.00 Standard rate 18.00 14.40 Difference $0.20 $0.40 X X Actual time 487.5 140.0 Direct labor rate variance $97.60 X UV $56.00 X Direct Labor Time Variance Mixing Department Filling Department Actual time 487.5 140.0 Standard time 500.0 150.0 X Difference 12.0 X 10.0 X X Standard rate 18.00 V 14.40 V Direct labor time variance $216.00 X $144.00 X U 12. Determine and interpret the factory overhead controllable variance. Enter a favorable variance as a negative amount, Factory Overhead Controllable Variance Actual variable overhead $305.00 Variable overhead at standard cost 300.00 Factory overhead controllable variance $5.00 UV The factory overhead controllable variance was caused by the variance in utilities Feedback 13. Determine and interpret the factory overhead volume variance. Round rate to four decimal places. Enter a favorable va Factory Overhead Volume Variance Normal volume (cases) 1,600 Actual volume (cases) 1,500 Difference 100 X Fixed factory overhead rate $12.1600 X Factory overhead volume variance $1,216.00 X
