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22-4.a Comprehensive Assignment eBook Calculator Comprehensive Problem 5 Instructions Amount Descriptions Questions (Part A) Production Budget Direct Materials Purchases Budget Direct Labor Cost Budget Factory Overhead Cost Budget Budgeted Income Statement Variance Analysis (Part C) 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 100 oz $0.02 $ 2.00 Natural oils Variable 30 oz 0.30 9.00 Bottle (8-oz.) Variable 12 bottles 0.50 6.00 $17.00 DIRECT LABOR Department Cost Behavior Time per Case Labor Rate per Hour Cost per Case Mixing Variable 20 min. $18.00 S6.00 Filling Variable 5 14.40 1.20 25 min. $7.20 FACTORY OVERHEAD Cost Behavior Total Cost Utilities Mixed $600 Facility lease Fixed 14.000 Equipment depreciation Fixed 4.300 Supplies Fixed 660 $19.560 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 utilities cost, which is part of factory overhead, is a mixed cost. The following information was gathered from the first six months of operation regarding this cost: Case Production 500 January February March Utility Total Cost S600 660 800 1.200 740 720 April 1.100 May 950 690 June 1,025 705 Required-Part A: 1. Determine the fixed and variable portion of the utility 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 (1). 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 Cases Cost 300 Estimated finished goods inventory, August 1 Desired finished goods inventory, August 31 $12,000 7,000 175 Materials Inventory: Oils Cream Base (oz.) (oz.) Bottles (bottles) 600 250 290 Estimated materials inventory, August 1 Desired materials inventory, August 31 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 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 factory overhead cost budget. If an amount box does not require an entry, leave it blank. (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 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. Questions (Part A) x 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 cases 3. Determine the fixed costs per month, including the utility fixed cost from part (1). 1 Total fixed costs: 2 3 4 5 6 4. Determine the break-even number of cases per month cases 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 Plus Total cases required Less Direct Materials Purchases Budget 6. Prepare the August direct materials purchases budget Enter all amounts positive numbers Genuine Spice Inc. Direct Materials Purchases Budget For the Month Ended August 31 Cream Base (oz.) Natural Oils (oz.) Bottles (bottles) Total Plus Less Direct materials to be purchased X $ $ $ $ $ $ Direct Labor Cost Budget 7. 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 (Entries of zero (O) 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 S $ $ Facility lease Equipment depreciation Supplies Total S Budgeted Income Statement X 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 1 $ Direct materials purchases Cost of direct materials available for use IS 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 31 Cost of goods sold Gross profit Selling expenses Income before income tax $ Variance Analysis (Part C) 10. Determine and interpret the direct materials price and quantity variances for the three materials. Enter a favorable variance as a negative amount and an unfavorable variance as a positive amount. Direct Materials Price Variance Cream Base Natural Oils Bottles S s Difference s S Direct materials price variance Direct Materials Quantity Variance Cream Base Natural Oils Bottles Difference Direct materials quantity variances The fluctuation in caused the direct material price variances. All the quantity variances were indicating 11. Determine and interpret the direct labor rate and time variances for the two departments. Round hours to the nearest tenth of an hour. Enter a favorable variance as a negative amount, and an unfavorable variance as a positive amount Direct Labor Rate Variance Mixing Department Filling Department $ Difference $ Direct labor rate variance Variance Analysis (Part C) x Direct Labor Time Variance Mixing Department Filling Department Difference X Direct labor time variance S The change in the caused the labor rate variances. This change have been responsible for the direct labor time variance 12 Determine and interpret the factory overhead controllable variance Enter a favorable variance as a negative amount, and an unfavorable variance as a positive amount. Factory Overhead Controllable Variance Factory overhead controllable variance S The factory overhead controllable variance was caused by the variance in 13. Determine and interpret the factory overhead volume variance Round rate to four decimal places. Enter a favorable variance as a negative amount, and an unfavorable variance as a positive amount. Factory Overhead Volume Variance Normal volume cases) Actual volume cases) Difference x Factory overhead volume variance The volume variance indicates the cost of 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) and (7)? Comprehensive Problem 5 Instructions Amount Descriptions Questions (Part A) Production Budget Direct Materials Purchases Buda Instructions Genuine Spice Inc. began operations on January 1 of the current year. The company produces eight-ounce bottles of land and body lotion called Etemal Beauty. The lotion is sold wholesale in 12-bottle cases for $100 percase. 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 Creambase Variable 100 $0.02 $2.00 Natural oils Variable 30 2 0.30 Bottle (8-) Variable 12 bottles 0.50 6.00 $17.00 DIRECT LABOR Department Cost Behavior Time per Case Labor Rate per Hour Cost per Case Mading 20 min $18.00 $5.00 5 14.40 1 20 25 $7.20 ChedMy Work 2 more Check My Worker Assignment Score: 0.0% Emainstructor Grammarly.dmg MacBook Pro TWILI ILLIU TUUUU WUN a Comprehensive Assignment eBook Calculator Comprehensive Problems Instructions Amount Descriptions Questions (Part A) Production Budget Direct Materials Purchase Budget ! Instructions FACTORY OVERHEAD Cost Behavior Total Cost Usilities Mixed $600 Facility lease Fixed 14,000 Equipment depreciation Fed 4 300 Supplies Fixed 660 $19,560 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 utilities cost, which is part of factory overhead, is a mixed cost. The following information was gathered from the first six months of operation regarding this cost Case Production 500 Utility Total Cost $500 January February 550 800 1,200 March 740 720 April May June 1.100 950 690 705 Check My Work 2 more Check My Work uses remaining signment Score: 0.0% Grammarly.dmg Comprehensive Assignment eBook Calculator Comprehensive Problems tructions Amount Descriptions Questions (Part A) Production Budget Direct Notarial Purchases Budget Instructions Required-Part A 1. Determine the feed and cable portion of the utility cost using the biblew method 2. Determine the contribution murgh percase. 3. Determine the feed costs per month, including the way we cost from part (1) 4. Determine the break even number of cases per month Part 8 - August Budgets During July of the current yow, the management of Genuine Spice Inc. asked the controlor to preparo August madacturing and income statement budget. Demand was expected to be 1.500 ot 100 per case for August. Inventory planning Information is provided as follows: Finished Goods inventory Cases Cost Estimated finished goods inventory, August 1 Desired finished goods inventory, August 31 300 175 $12,000 7.000 Materials inventory Cream Base Oils fo) 290 Bottles (bottles) 600 Estimated materials inventory, August 1 Desired materials inventory, August 31 250 1,000 360 240 Check My Work 2 more Check My Work uses remaining Instructions 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 Required-Part: 5. Prepare the August production budget 6. Prepare the August direct materiais purchases budget 7. Prepare the August direct labor cost budpet. Round the hours required for production to the nearest hour 8. Prepare the August factory overhead cost budget an amount box does not require an entry favebank (Entries of 20 ( will be cleared automatically by CNOW)" 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." "Enteral amounts as positive numbers Comprehensive Assignment eBook Calculator Comprehensive Problems Instructions Amount Descriptions Questions (Pan A Production Budget Direct Materials Purchases Budget Instructions Part C-August Variance Analysis During September of the current you, the controller 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 the planned at the beginning of the month. Actual data for August were as follows: Crown base Actual Direct Materials Price per Unit Quantity per Case $0.016 per or 10202 30:32 per or 31 O $0.42 per bottle 12.5 boties Natural Botte(8-02 Actual Direct Labor Rate $18.20 14.00 Ming Filling Actual Direct Labor Time per Case 19.50 min 5.60 min Actual variable overhead Normal volume $305.00 1,500 cases The prices of the materials were different from standard due to fluctuations in market prices. The standard quantity of materials used percase was an ideal standard. The Mixing Department used a higher grade labor classification during the month, thus causing the actual laborate to exceed standard. The Filing Department used a lower grade labor classication during the month, thus causing the actual labor rate to be less than standard 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. Determine 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) and (7)? Questions (Part A) 1. Determine the fixed and variable portion of the utility cost using the high-low method At Low Point At High Point $0.20 $0.20 Variable cost per unit Total fixed cost Total cost s $ $ $ 2. Determine the contribution margin per case. $ 3. Determine the fixed costs per month, including the utility fixed cost from part (1). 1 Total fixed costs: 2 3 4 5 6 4. Determine the break-even number of cases per month cases 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 Plus Total cases required Less Instructions Amount Descriptions Questions (Part A) Production Budget Direct Materials Purch ses Budget Direct Materials Purchases Budget 6. Prepare the August direct materials purchases budget. Enter all amounts as positive numbers. Genuine Spice Inc. Direct Materials Purchases Budget For the Month Ended August 31 Cream Base (oz.) Natural Oils (ox.) Bottles (bottles) Total Plus Less Direct materials to be purchased X $ $ $ s Check My Work 2 more Check My Work uses remaining Assignment Score: 0.0% D Grammarly.dmg Instructions Amount Descriptions Questions (Part A) Production Budget Direct Materials chases Budget Direct Labor Cost Budget 7. Prepare the August direct labor cost budget. Round the hours required for production to the nearest hour. Enter al amounits as positive numbers. Genuine Spice Inc. Direct Labor Cost Budget For the Month Ended August 31 Mixing Filling Total $ $ $ $ $ whensive Assignment oBook hensive Problems uctions Amount Descriptions Questions (Part A) Production Budget Direct Materials Purchases Budget Factory Overhead Cost Budget 8. Prepare the August factory overhead cost budget Enteral amounts as positive numbers. Man amount box does not require an entry leavet bank ( Ees of zero (O) will be cleared automatically by CNOW) Genuine Spice Inc Factory Overhead Cost Budget For the Month Ended August 31 Fixed Variable Total Factory overhead $ S s Facility lease Equipment depreciation Supplies Total $ My Work 2 more Check My Work uses remaining nt Score: 0.0% Email Instructor Save and ammarly.dmg MacBook Pro Comprehensive Problems Instructions Amount Descriptions Questions (Part A Production Budget Direct Materials Purchases Budget Budgeted Income Statement Prepare the Agar budpoled Income some including expenses al amounts postes. NOTE: Because you were to prepare a cost of goods and get the cost of goods door wie part of the bencome Genuine Spiele Budgeted Income Sulemem For the Mom Ended Aug 31 Reversas 3 5 Fished goods or Directa Directory August Druh 3 S Landrovery, Corte de mers placed into Dreher Factory ovat Cotagood andere Calculator eBook Comprehensive Assignment Comprehensive Problem 5 Production Budget Direct Materials Purcha Questions (Part A) Instructions Amount Descriptions Budgeted Income Statement Finished goods inventory, August 1 Direct materials: $ Direct materials inventory, August 1 Direct materials purchases Cost of direct materials available for use $ 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 31 Cost of goods sold Gross profit Selling expenses Income before income tax $ Check My Work 2 more Check My Work uses remaining, al Direct Materials Price Variance Cream Base Natural Oils s $ s Difference s S S X Direct materials price variance S S $ Direct Materials Quantity Variance Cream Base Natural Oils Bottles Difference $ $ 5 Direct materials quantity variances s s The fluctuation in caused the direct material price variances. All the quantity variances were indicating Direct Labor Rate Variance Mixing Department Filling Department s $ Difference $ s X Direct labor rate variance s Direct Labor Time Variance Mixing Department Filling Department Difference Direct labor time variance $ $ The change in the caused the labor rate variances. This change have been responsible for the direct labor time variance 12. Determine and interpret the factory overhead controllable variance. Enter a favorable variance as a negative amount, and an untevorable variance as a positive amount Factory Overhead Controllable Variance Factory overhead controllable variance $ The factory overhead controllable variance was caused by the variance in 13. Determine and the factory overhead volume variance. Round rate to four decimal places Entra lavorable and as a negative amount and an navorable variance as a positive amount Factory Overhead Volume Variante Normal volume e Actual volume ces) Difference S Factory overed volume varie S The volume varico indicates the cost of 1. Why are the standard direct labor and det materials costs in the calculations for parts (10) and (r)sed on the actual 1.500 case production volume te the pred 1.375 production used in the budget for at and

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