Need help on part A

Comprehensive Problem 5 Genuine Spice Inc. began operations on January 1 of the current year. The company produces 8-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 1199 Chapter 23 Evaluating Variances from Standard Costs direct materials, direct labor, and factory overhead costs are as follows: DIRECT MATERIALS Cost Units Behavior Variable 100 Ors. Variable 30 os. Variable 12 bottles Cream base Natural oils Bottle (8-oz) per Case Cost per Unit $0.02 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 56.00 1.20 $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 2. $55.60 Part A-Break-Even Analysis The management of Genuine Spice Inc. wishes 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: Month Case Production Utility Total Cost January 500 $600 February 800 660 March 1.200 740 April 1,100 720 May 950 June 1,025 705 690 Instructions 1. Determine the fixed and variable portions 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. B D E G 1 2 Variable cost per unit 3 Fixed cost per unit 4 + 5 N 6 7 3 3 B 9 4 cases 10 11 12 13 14 15 16 17 18 19 20 21 22 Part A Part B Part Type here to search e