The Juicy Company manufactures flavored organic lemonade. Management is ready to close the books for the end of the 1^st quarter in 2013 and your supervisor has presented you with fallowing information.

a. Total sales in gallons of flavored lemonade for January 2013 through March 2013 are as fallows:

January 10,000

February 12,000

March 14,000

Each gallon of lemonade is package in eight 16 ounce bottles and sold in a case that sells for $15.00 per case. The company produced 37,500 units during the first quarter of 2013.

b. The companys Variable Costs include the fallowing

Direct materials of $3.25 per gallon.

Direct labor of $____ per gallon (each gallon of lemonade requires 15 minutes of direct labor time and the wage rate is $8 per hour)

Variable MOH $_____ per gallon (the variable overhead rate is $2.00 per machine hour and processing one gallon of lemonade takes 45 minutes of machine time)

Variable Selling and Admin. costs of $1.25 per gallon

c. The companys fixed costs for the quarter include the following:

Manufacturing Overhead $37,500

Selling and Administrative $26,900

The companys fixed manufacturing overhead per gallon is $_____ (The Fixed Manufacturing Overhead rate is based on the Fixed Costs for the quarter and the units produced for the quarter.)

d. The companys manufacturing overhead is applied based on the number of gallons produced using the Variable Manufacturing Overhead Rate per gallon calculated in b and the Fixed Manufacturing Overhead rate per gallon calculated in c.

e. Raw Materials Inventory consists entirely of direct materials and, at the beginning of the year, consists of 700 units of direct material at a cost of $3.25 per unit. The company purchased 38,000 units of direct material at a cost of $3.25 per unit. Each gallon of lemonade requires one unit of direct materials.

f. Beginning Work in process inventory consists of 500 gallons of partially processed lemonade. All raw materials are added at the beginning of the production process and theses partially completed units are 60% complete with respect to conversion costs. Ending work in process consists of 800 gallons of partially processed lemonade 40% complete with respect to conversion costs. The company completed and transferred out 37,500 units this quarter.

The beginning work in process and current period costs are as follows:

Beginning WIP: Direct Materials $1,625 Conversion Cost $450

Current period costs: Direct materials $121,875 Conversion Costs $168,750

g. There are 300 gallons of lemonade in Finished Goods Inventory at the beginning of the year carried at a cost of $7.75. There are 1,800 gallons in ending Finished Goods Inventory carried at a cost of $7.75 per unit.

REQUIRED:

1, A Production Cost Report using both the weighted average and FIFO methods of assigning costs to goods transferred out and ending inventory.

2. Schedule of Costs of Goods manufactured and a Scheduled of Cost of Goods Sold using both methods of assigned costs to goods transferred out and ending inventory.

3. Gross Margin and Contribution Margin Income Statement (Hint: For the Gross Margin Income Statement, Total Cost of Goods Sold should equal to the Cost of Goods Sold calculated based on the FIFO method of assigning to goods transferred out and ending inventory).

4. A Break-Even Analysis that include all of the fallowing components (HINT: Use the information in parts a, b, and c for calculations)

a. Break-Even in gallons and dollars

b. Target Profit in gallons and dollars if company wants a net operating income of $250,000 after taxes. Tax rate is 20%.

c. Margin of Safety expressed in dollars, units, and as percentage of sales.