PLEASE SOLVE PART C AND SHOW ALL THE WORK
THIS LINK IS THE ANSWER FOR PART A AND B
https://www.chegg.com/homework-help/questions-and-answers/comprehensive-problem-5-genuine-spice-inc-began-operations-january-1-current-year-company--q39435419?trackid=5Bomfgt8
Comprehensive Problem 5 th Genuine Spice Inc. began operations on January 1 of the current year. 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: 002. 000201 002 DIRECT MATERIALS Units per Case Direct Materials Cost Cost Behavior Cost per Casebed $ 2.00 per Unit cnet2 $0.02 Variable 100 oz. Cream base 9.00 Natural oils Variable 0.30 30 oz. 0at 12 bottles Bottle (8-oz.) Variable 6.00 0.50 $17.00 000:4 0042E2 DIRECT LABOR Cost Behavior Time Labor Rate per Hour Direct Labor Cost per Case per Case 20 min. Department Stve nuadtue 00 Mixing beies Variable 0 $18.00 $6.00 b Filling Soudo ta ao 000 00084 Variable 5 14.40 1.20 2orals y 25 min. 0 2NSm endand bs 000 0 $7.20 FACTORY OVERHEAD Cost Behavior toio o ot d o A dos Total Cost Utilities Mixed $ 600 Facility lease Equipment depreciation Fixed 14,000 Fixed 4,300 Supplies Fixed 660 0.a ibou oa $19,560 igbneme 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 ertot n ot 1167 Evaluating Variances from Standard Costs Chapter 23 cost. The following information was gathered from the first six months of operation re- garding this cost Utility Total Cost $600 Case Production 500 January 660 800 February 740 March 1,200 April 720 1,100 690 950 nen n iM b 3u 2ud od Ol er Instructions May 705 1,025 June 1. Determine the fixed and variable portion of the utility cost using the high-low method 2. Determine the contribution margin per case. 2. $55.60 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 c 9d8 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: noetsl n o olo ba(0) eao Sdb Finished Goods Inventory: Cost Cases $12,000 7,000 300 Estimated finished goods inventory, August 1 Desired finished goods inventory, August 31 175 Materials Inventory: Oils (oz.) Bottles (bottles) Cream Base (oz.) baubot pdvlogs a s Estimated materials inventory, August 1 d bto nouc ob vit o ot rgnipcncThere was negligible work in process inventory assumed for either the beginning or end mio 0 sd biood aundlb ot trobbob yeh unit or estimated units per case operating data from January. Srw odan eqInstructions 250 290 600 360 240 Desired materials inventory, August 31 1,000 of the month; thus, none was assumed. In addition, there was no change in the cost per 5 Prepare the August production budget. 6. Prepare the August direct materials purchases budget. 6. Bottles 7. Prepare the August direct labor cost budget. Round the hours required for production to the nearest hour. purchased, $8,070 8. Prepare the August factory overhead cost budget. 9. Prepare the August budgeted income statement, including selling expenses. d buow db Part C-August Variance Analysis 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: Actual Direct Materials Price per Unit Actual Direct Materials Quantity per Case Cream base $0.016 per oz. 102 oz. Natural oils $0.32 per oz. $0.42 per bottle 31 oz. Bottle (8-oz.) 12.5 bottles (ContionuodY 1168 Chapter 23 Evaluating Variances from Standard Costs voll Actual Direct Labor Time per Case Actual Direct Labor Rate Mixing Filling 19.50 min. $18.20 5.60 min 14.00 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 Mix- ing 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. iod Instructions 10. Determine and interpret the direct materials price and quantity variances for the three materials. 9anoisd 11. Determine and interpret the direct labor rate and time variances for the two departments. Round hours to the nearest hour. 12. Determine and interpret the factory overhead controllable variance. 11. Mixing time variance, $(225) F 12. $5 U 13. Determine and interpret the factory overhead volume variance. 14. Why 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 1,375 cases of production used in the budgets for parts (6) and (7)? Comprehensive Problem 5 th Genuine Spice Inc. began operations on January 1 of the current year. 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: 002. 000201 002 DIRECT MATERIALS Units per Case Direct Materials Cost Cost Behavior Cost per Casebed $ 2.00 per Unit cnet2 $0.02 Variable 100 oz. Cream base 9.00 Natural oils Variable 0.30 30 oz. 0at 12 bottles Bottle (8-oz.) Variable 6.00 0.50 $17.00 000:4 0042E2 DIRECT LABOR Cost Behavior Time Labor Rate per Hour Direct Labor Cost per Case per Case 20 min. Department Stve nuadtue 00 Mixing beies Variable 0 $18.00 $6.00 b Filling Soudo ta ao 000 00084 Variable 5 14.40 1.20 2orals y 25 min. 0 2NSm endand bs 000 0 $7.20 FACTORY OVERHEAD Cost Behavior toio o ot d o A dos Total Cost Utilities Mixed $ 600 Facility lease Equipment depreciation Fixed 14,000 Fixed 4,300 Supplies Fixed 660 0.a ibou oa $19,560 igbneme 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 ertot n ot 1167 Evaluating Variances from Standard Costs Chapter 23 cost. The following information was gathered from the first six months of operation re- garding this cost Utility Total Cost $600 Case Production 500 January 660 800 February 740 March 1,200 April 720 1,100 690 950 nen n iM b 3u 2ud od Ol er Instructions May 705 1,025 June 1. Determine the fixed and variable portion of the utility cost using the high-low method 2. Determine the contribution margin per case. 2. $55.60 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 c 9d8 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: noetsl n o olo ba(0) eao Sdb Finished Goods Inventory: Cost Cases $12,000 7,000 300 Estimated finished goods inventory, August 1 Desired finished goods inventory, August 31 175 Materials Inventory: Oils (oz.) Bottles (bottles) Cream Base (oz.) baubot pdvlogs a s Estimated materials inventory, August 1 d bto nouc ob vit o ot rgnipcncThere was negligible work in process inventory assumed for either the beginning or end mio 0 sd biood aundlb ot trobbob yeh unit or estimated units per case operating data from January. Srw odan eqInstructions 250 290 600 360 240 Desired materials inventory, August 31 1,000 of the month; thus, none was assumed. In addition, there was no change in the cost per 5 Prepare the August production budget. 6. Prepare the August direct materials purchases budget. 6. Bottles 7. Prepare the August direct labor cost budget. Round the hours required for production to the nearest hour. purchased, $8,070 8. Prepare the August factory overhead cost budget. 9. Prepare the August budgeted income statement, including selling expenses. d buow db Part C-August Variance Analysis 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: Actual Direct Materials Price per Unit Actual Direct Materials Quantity per Case Cream base $0.016 per oz. 102 oz. Natural oils $0.32 per oz. $0.42 per bottle 31 oz. Bottle (8-oz.) 12.5 bottles (ContionuodY 1168 Chapter 23 Evaluating Variances from Standard Costs voll Actual Direct Labor Time per Case Actual Direct Labor Rate Mixing Filling 19.50 min. $18.20 5.60 min 14.00 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 Mix- ing 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. iod Instructions 10. Determine and interpret the direct materials price and quantity variances for the three materials. 9anoisd 11. Determine and interpret the direct labor rate and time variances for the two departments. Round hours to the nearest hour. 12. Determine and interpret the factory overhead controllable variance. 11. Mixing time variance, $(225) F 12. $5 U 13. Determine and interpret the factory overhead volume variance. 14. Why 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 1,375 cases of production used in the budgets for parts (6) and (7)
