Problem 2 Girl Cover, Inc., began operations on January 1, 2020. The company produces a hand and body lotion in an eight-ounce bottle called Heavenly Beauty. The lotion is sold wholesale in 12-bottle cases for $80 per case. There is a selling commission of $16 per case which is the only period cost. The budgeted direct materials, direct labor, and factory overhead costs are as follows: Direct Materials Units per Case Cost Behavior Cost per Unit Cream Base Essential Oils Bottle (8-oz.) Variable Variable Variable 72 ozs. 24 ozs. 12 bottles T $0.015 0.250 0.400 Direct Materials Cost per Case $1.08 6.00 4.80 $11.88 Direct Labor Time per Case Department Cost Behavior Labor Rate per Hour $15.00 12.00 Mixing Filling Variable Variable 16.8 min. 4.2 min. 21.0 min. Direct Labor Cost per Case $4.20 0.84 $5.04 Utilities Facility Lease Equipment depreciation Supplies Factory Overhead Cost Behavior Mixed Fixed Fixed Fixed Total Cost $200 + $.10 per case produced 12,043 3,600 600 Income Taxes -30% Estimated Gain on Sale of Land - $5,000 Estimated Interest Expense - $2,200 During July of the current year, the management of Girl Cover, Inc., asked the controller to prepare August manufacturing and income statement budgets. Demand was expected to be 1,300 cases at $80 per case for August Inventory planning information is provided as follows: $6,000 3,000 Finished Goods Inventory Cases Estimated finished goods inventory, 200 August 1, 2020 Desired finished goods inventory. 100 August 31, 2020 Materials inventory Cream Base lors) Estimated materials inventory. 200 August 1, 2020 Desired materials inventory 800 August 31, 2020 Oils (oz.) Bottles 240 (bottles) 500 300 200 There was neglig ble work in process inventory planned 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 Instructions (Show all your work/computations.) 1. Prepare the August production budget. (2 pts) 2. Prepare the August direct materials purchases budget. (6 pts) 3. Prepare the August direct labor budget. (3 pts) 4. Prepare the August factory overhead budget. (2 pts) 5. Prepare the August cost of goods sold budget. (7 pts) 6. Prepare the August budgeted income statement, including all appropriate items (10 pts)