Questions (Part A) Production Budget Amount Descriptions |0 Instructions 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 tollows: DIRECT MATERIALS Cost per Unit $0.02 0.30 0.50 Cost Behavior Units per Case 100 o2 30 oz Cost per Case $2.00 9.00 6.00 $17.00 Cream base Variable Natural oils Variable Bottle (8-0Z) Variable 1 DIRECT LABOR Department Cost Behavior Time per Case Mxing Variable20 min. Filling Variable5 Labor Rate per Hour $18.00 14.40 Cost per Case $6.00 1.20 25 min. $7 20 FACTORY OVERHEAD Cost Behavior Total Cost FACTORY OVERHEAD Cost Behavior Mixed Fixed Fixed Fixed Total Cost $600 14,000 4,300 660 $19,560 Utilties Facility lease Equipment depreciation 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 utitos cost, which is part of factor overhead, is a mixed cost. The tollowing information was gathered from the first six months of operation regarding this cost: Case Production Utility Total Cost 500 800 1,200 1,100 $600 660 740 720 690 March June 1,025 705 Required-Part A: 1. Determine the Exed and variable portion of the utity cost using the high-low method 2. Determine the contribution margin per case 3. Determine the fed costs per month, including the utilty ted cost from party. 4. Determine the break-even number of cases per month Questions (Part A) of h 1. Determine the fixed and variable portion of the utility cost using the high-low method case At High Point At Low Point Variable cost per unit Total fixed cost Total cost 2. Determine the contribution margin per case. 3. Determine the fixed costs per month, including the utility fixed cost from part (1). Total fixed costs: 1 4. Determine the break-even number of cases per month. cases 2 more Check My Work uses remaining Check My Work