Question is at the bottom

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 Plus desired ending inventory Total cases required Less estimated beginning inventory Total cases to be produced 1. Determine the fixed and variable portion of the utility cost using the high-low method. At High Point At Low Point Variable cost per unit $ Total fixed cost Total cost 2. Determine the contribution margin per case. S 3. Determine the fixed costs per month, including the utility fixed cost from part (1). 1 Total fixed costs 4. Determine the break-even number of cases per month cases Direct Labor Cost Budget . 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 Factory Overhead Cost Budget 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. (Enties of zero (0) will be cleared automatically by CNOW) Genuine Spice Inc. Factory Overhead Cost Budget For the Month Ended August 31 Fixed Variable Total Factory overhead: Utilities Facility lease Equipment depreciation Supplies Total Budgeted Income Statement 9. Prepare the August budgeted income statement, including selling expenses. Enter all amounts as positive numbers. 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 Genuine Spice Inc. Budgeted Income Statement For the Month Ended August 31 Revenue from sales Finished goods inventory, August 1 Direct materials: Direct materials inventory, August Direct materials purchases Cost of direct materials available for use S Less direct materials inventory, August 31 Cost of direct materials placed in production Direct labor Factory overhead Cost of goods manufactured Cost of finished goods available for sale Less finished goods inventory, August 3 Cost of goods sold Gross profit Selling expenses Income before income tax Instructions 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: DIRECT MATERIALS Cost Behavior Units per Case Cost per Unit Cost per Case Cream base Variable Natural oils Variable Bottle (8-oz) Variable 100 oz. 30 oz. 12 bottles $0.02 0.30 0.50 $ 2.00 9.00 6.00 $17.00 DIRECT LABOR Department Cost Behavior Moxing Variable Filling Variable Time per Case Labor Rate per Hour Cost per Case $6.00 1.20 $7.20 20 min. $18.00 14.40 25 min. FACTORY OVERHEAD Cost Behavior Mixed Fixed Total Cost $600 14,000 4,300 660 $19,560 Utilities Facility lease Equipment depreciationFixed Supplies Fixed Part A-Break-Even Analysis Spice Inc. wants to determine the number of cases required to break even per month. The utlities cost, which is part of factory overhead, is a mibxed cost. The following i information was gathered from the first six months of operation regarding this cost Case Production Utility Total Cost January February March 500 800 ,200 1,100 950 1,025 $600 660 740 720 690 June 705 Required-Part A 1 Determine the fixed and variable portion of the utlity cost using the high-low method. 2. Determine the contribution margin per case. 3. Determine the fixed costs per month, including the utility fixed cost from part () 4 Determine the break-even number of cases per month 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 7,000 Materials Inventory Cream Base Oils Bottles Estimated materials inventory, August Desired materials inventory, August 31 (oz.)(oz) (bottles) 250 1,000360 240 290 600 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 There was nogligible work in process inventory assumed for either the beginning or end of the change in the cost per unit or estimated unts per case operating data from January sumed. In addition, there was no Required-Part B 5. Prepare the August production budget." 6. Prepare the August direct materials purchases budget 7. Prepare the August direct labor cost budget. Round the hours required for production to the nearest hour 8. Prepare the August faciory overhead cost budget It an amount box does not require an entry, leave it biank. (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. Part C-August Variance Analysis During September of the current year, the controler 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 of the month. Actual data for August were as follows: Actual Direct Materials Quantity per Case 102 oz 31 oz Price per Unit Cream base $0.016 per oz. Natural oils $0.32 per oz. Bottle (8-0z.) $0.42 per bottle 12.5 bottles Actual Direct Labor Time per Case 19.50 min 5.60 min. Actual Direct Labor Rate Mixing $18.20 Filling 14.00 Actual variable overhead $305.00 Normal volume 1,600 cases 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 idea 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 standand Required-Part C: 10. Determine and interpret the direct materials price and quantity variances for the three materials. 11. Determine and interpret the direct labor rate and time variances for the two departments. Round hours to the nearest tenth of an hour. 12. Deternine and interpret the factory overhead controllable variance. 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)