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 DIRECT MATERIALS Cost Units Behavior per Case Variable Variable 30 OZ Variable 12 bottles Creambase Natural oils Bottle 18-02) 100 Cast per Unit $0.02 0.30 0.50 Direct Materials Cost per Case $ 200 9.00 600 $17.00 DIRECTLABOR Time per Case Department Mixing Filling Cost Behavior Variable Variable 20 min 5 25 min Labor Rate per Hour $18.00 1440 Direct Labor Cost per Case 5600 1.20 5720 FACTORY OVERHEAD Cost Behavior Total Cost Utilities Mind 800 Facility lease Fixed 14000 Equipment depreciation Feed 4300 Supplies Fixed 669 1956 P RE M N 0 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 information is provided as follows: Finished Goods Inventory Estimated finished goods inventory, Augu Desired finished goods inventory, Augusti Cases 300 175 Cost $12,000.00 $ 7,000.00 Materials Inventory Estimated materials inventory, August 1 Desired materials inventory, August 31 Cream Base (oz.) Oils (oz.) Bottels (oz.) 250 290 600 1,000 360 240 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 January Instructions 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 factory overhead cost budget, 9. Prepare the August budgeted income statement includng Beling expenses D E A B C 1 REQUIREMENT #5: Develop the production budget. 2 3 Quivers Inc. 7 Production Budget For the Month Ended August 31 5 5 Cases Expected cases to be 1,500 7 sold Plus desired ending 175 3 inventory Total units required 1,675 Less estimated beginning 300 10 inventory Total units to be 11 1,375 produced 12 13 F G Total Bottles [bottles) 16.500 240 16.740 Direct Materials Purchases Budget For the Month Ended August 31 Cream Natural Base (oz.) Olls 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 * Unit price $0.02 $0.30 Total direct materials to be $2.765 $12,396 purchased Raw Materials Units X Volume = Total Cream Base 0.02 100 600 0.30 30 9 Natural Oils 16,140 0.50 12 Bottles $0.50 $8,070 $23.231 Requirement #7: Develop the direct labor cost budget. Total Labor Units X Production Time /Hour - Total 1,375 20 60 458 Mixing Quivers Inc. Direct Labor Cost Budget For the Month Ended August 31 Mbung Fling Hours required for 458 115 production of: Ophelia Wax Product * Hourly rate $ 18.00 $ 14.00 Total direct labor cost $ 8.244.00 $ 1.610.00 1,375 5 50 115 Hing $ 9,854.00 Requirement #8: Develop the factory overhead cost budget. K Quivers Inc. Factory Overhead Cost Budget For the Month Ended August 31 Fored Variable Total Cost Cases Fred Cost from Question 3 Variable Unity Cox Total Cost 19,460 $ 600 Utilities Facility Lease Equipment Depreciation Supplies Total factory overhead cost $ $ $ 14.000 4,300 660 $ 19,560 0 Requirement 09: Create the budgeted income statement G Units Price Total Sales Selling Expenses Quivers Inc. Budgeted Income Statement For the Month Ended August 31 Sales Finished goods inventory, August Direct material Direct materials inventory. Augusti Direct materials purchases (from Question $ 23.231 6] Cost of direct materials available for use Less direct materials inventory. August 31 Cost of direct material placed in production Direct labor from Question 71 $ 9354 Factory overhead from Question 81 19.560 Cost of goods manufactured Cost of fished goods available for sale Less finished goods inventory, August 31 Cost of goods sold Gross profil Selling expenses Income from operations Bottels (0) Total Cream Bose (ozols (2) Direct materials inventory, August 250 Direct materials inventory August 31 1.000 360 600 $1,140 $1.400 Rate Cream Bose los soul Bolle 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 DIRECT MATERIALS Cost Units Behavior per Case Variable Variable 30 OZ Variable 12 bottles Creambase Natural oils Bottle 18-02) 100 Cast per Unit $0.02 0.30 0.50 Direct Materials Cost per Case $ 200 9.00 600 $17.00 DIRECTLABOR Time per Case Department Mixing Filling Cost Behavior Variable Variable 20 min 5 25 min Labor Rate per Hour $18.00 1440 Direct Labor Cost per Case 5600 1.20 5720 FACTORY OVERHEAD Cost Behavior Total Cost Utilities Mind 800 Facility lease Fixed 14000 Equipment depreciation Feed 4300 Supplies Fixed 669 1956 P RE M N 0 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 information is provided as follows: Finished Goods Inventory Estimated finished goods inventory, Augu Desired finished goods inventory, Augusti Cases 300 175 Cost $12,000.00 $ 7,000.00 Materials Inventory Estimated materials inventory, August 1 Desired materials inventory, August 31 Cream Base (oz.) Oils (oz.) Bottels (oz.) 250 290 600 1,000 360 240 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 January Instructions 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 factory overhead cost budget, 9. Prepare the August budgeted income statement includng Beling expenses D E A B C 1 REQUIREMENT #5: Develop the production budget. 2 3 Quivers Inc. 7 Production Budget For the Month Ended August 31 5 5 Cases Expected cases to be 1,500 7 sold Plus desired ending 175 3 inventory Total units required 1,675 Less estimated beginning 300 10 inventory Total units to be 11 1,375 produced 12 13 F G Total Bottles [bottles) 16.500 240 16.740 Direct Materials Purchases Budget For the Month Ended August 31 Cream Natural Base (oz.) Olls 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 * Unit price $0.02 $0.30 Total direct materials to be $2.765 $12,396 purchased Raw Materials Units X Volume = Total Cream Base 0.02 100 600 0.30 30 9 Natural Oils 16,140 0.50 12 Bottles $0.50 $8,070 $23.231 Requirement #7: Develop the direct labor cost budget. Total Labor Units X Production Time /Hour - Total 1,375 20 60 458 Mixing Quivers Inc. Direct Labor Cost Budget For the Month Ended August 31 Mbung Fling Hours required for 458 115 production of: Ophelia Wax Product * Hourly rate $ 18.00 $ 14.00 Total direct labor cost $ 8.244.00 $ 1.610.00 1,375 5 50 115 Hing $ 9,854.00 Requirement #8: Develop the factory overhead cost budget. K Quivers Inc. Factory Overhead Cost Budget For the Month Ended August 31 Fored Variable Total Cost Cases Fred Cost from Question 3 Variable Unity Cox Total Cost 19,460 $ 600 Utilities Facility Lease Equipment Depreciation Supplies Total factory overhead cost $ $ $ 14.000 4,300 660 $ 19,560 0 Requirement 09: Create the budgeted income statement G Units Price Total Sales Selling Expenses Quivers Inc. Budgeted Income Statement For the Month Ended August 31 Sales Finished goods inventory, August Direct material Direct materials inventory. Augusti Direct materials purchases (from Question $ 23.231 6] Cost of direct materials available for use Less direct materials inventory. August 31 Cost of direct material placed in production Direct labor from Question 71 $ 9354 Factory overhead from Question 81 19.560 Cost of goods manufactured Cost of fished goods available for sale Less finished goods inventory, August 31 Cost of goods sold Gross profil Selling expenses Income from operations Bottels (0) Total Cream Bose (ozols (2) Direct materials inventory, August 250 Direct materials inventory August 31 1.000 360 600 $1,140 $1.400 Rate Cream Bose los soul Bolle