Quivers Inc. began operations on January 1 of the current year. The company produces eight-ounce bottles of jet wax called Ophelia Shine. The wax 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 Crear base Natural oils Bottle (8-oz. DIRECT MATERIALS Cost Units Behavior per Case Variable 100 oz Variable 30 oz. Variable 12 bottles Cost per Unit 50.02 0.30 0.50 Direct Materials Cost per Case $ 2.00 9.00 6.00 $17.00 Department Mixing Filling Cost Behavior Variable Variable DIRECT LABOR Time per Case 20 min. 5 25 min Labor Rate per Hour $18.00 14.40 Direct Labor Cost per Case $6.00 1.20 $7.20 FACTORY OVERHEAD Cost Behavior Total Cost Utilities Mixed $ 600 Facility lease Fixed 14,000 Equipmenr depreciation Fixed 4,300 Supplies Fixed 660 $19,560 Part A. Break-even Analysis The management of Quivers 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 cost. The following information was gathered from the first six months of oneration regardline thic cact. Utility Total Month Case Productid Cost January 500 $ 600.00 February 800 $ 660.00 March 1,200 $ 740.00 April 1.100 $ 720.00 May 950 690.00 June 1,025 $ 705.00 Instructions 1. Determine the fixed and variable portion of the utility cost using the high-low 2. Determine the contrinution margin per case. 3. Determine the fixed costs per month, including the utility fixed cost from question (1). 4.Determine the break-even num ber of cases per month Part B. Budgets During July of the current year, the management of Quivers Inc. asked the controller, Robin, to prepare August manufacturing and income statement budgets. Demand was expected to be 1,500 cases of jet wax at $100 per case for August. Inventory planning linformation is provided as follows: Finished Goods Inventory Estimated finished goods inventory, Aug Desired finished goods inventory, Augus Cases 300 175 Cost ##### $7,000.00 Materials Inventory Estimated materials inventory, August 1 Desired materials inventory, August 31 Cream Base (oz.) Oils (oz.) 3ottels (oz.) 250 290 600 1,000 360 240 Requirement #6: Develop the direct materials purchases budget. Total Quivers Inc. Direct Materials Purchases Budget For the Month Ended August 31 Cream Natural Base (oz. Oils Units required for production 137.500 41.250 Plus desired ending inventory 1,000 360 Total units required 138,500 41,610 Less estimated beginning 250 290 inventory Total materials to be 138,250 41,320 purchased x Unit price Total direct materials to be $2,765 $12,396 purchased Bottles (bottles) 16,500 240 16,740 Raw Materials Units X Volume = Total Cream Base 100 1,375 137,500 600 30 1,375 41,250 Natural Oils 16,140 12 1,375 16,500 Bottles $8,070 $2,323 Requirement #7: Develop the direct labor cost budget. Quivers Inc. Direct Labor Cost Budget For the Month Ended August 31 Labor Units x Production Time Hour = Total 1,375 20 60 458 Mixing Filling Total Mixing 458 115 1,375 5 60 115 Filling Hours required for production of: Ophelia Wax Product x Hourly rate Total direct labor cost $ 18.00 $8,244.00 $ 14.40 $1,656.00 $9,900.00 ] Requirement #8: Develop the factory overhead cost budget. Quivers Inc. Factory Overhead Cost Budget For the Month Ended August 31 Cost Total Fixed Variable Total Cost Cases Fixed Cost [from Question 3] Variable Utility Cost $ 600 $ Utilities Facility Lease Equipment Depreciation Supplies $ 14,000 4,300 660 Total factory overhead cost $ 19,560 Requirement #9: Create the budgeted income statement. Units x Price = Total Sales Selling Expenses Cream Base (oz) Oils (oz) Bottels (oz.) Total Quivers Inc. Budgeted Income Statement For the Month Ended August 31 Sales Finished goods inventory, August 1 Direct materials: Direct materials inventory, August 1 Direct materials purchases (from Question 6] Cost of direct materials available for use Less direct materials inventory, August 31 Cost of direct materials placed in production Direct labor [from Question 7] Factory overhead [from Question 8] Cost of goods manufactured Cost of finished goods available for sale Less finished goods inventory, August 31 Cost of goods sold Gross profit Selling expenses Income from operations Direct materials inventory, August 1 Direct materials inventory, August 31 Rate Cream Base (oz) Oils (oz Bottels (oz