Note: You must complete part A before completing parts B and C. Genuine Spice Inc. began operations on January 1 of the current year. The company produces 8-ounce bottles of hand and bod Beauty. The lotion is sold wholesale in 12-bottle cases for $100 per case. There is a selling commission of $20 per case. The Jan direct labor, and factory overhead costs are as follows: Cost Behavior Direct Materials Cost per Case DIRECT MATERIALS Units Cost per Case per Unit 100 ozs. $0.02 30 oz. 0.30 12 bottles 0.50 Cream base Variable $2.00 9.00 Natural oils Variable Variable Bottle (8-02.) 6.00 $17.00 DIRECT LABOR Department Cost Behavior Time per Case Labor Rate per Hour Direct Labor Cost per Case Mixing Variable 20 min. $18.00 $6.00 Filling Variable 14.40 1.20 25 min $7.20 10 Check My Works used Cost Behavior Mixed Utilities Total Cost $600 14,000 4,300 Facility lease Fixed Fixed Equipment depreciation Supplies Fixed 660 $19,560 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 utiliti factory overhead, is a mixed cost. The following information was gathered from the first six months of operation regarding this Month Case Production Utility Total Cost January 500 $600 February 660 800 1,200 March April May 740 720 1,100 950 June 1,025 705 10 Check My Works used al eBook Estimated finished goods inventory, August 1 Desired finished goods inventory, August 31 Casus CUSE 300 $12,000 1757,000 Materials Inventory: Cream D (ozs.) 290 (ozs.) 250 1,000 Bottles (bottles) 600 240 Estimated materials inventory, August 1 Desired materials inventory, August 31 360 There was negligible work in process inventory assumed for either the beginning or end of the month; thus, none was assur cost per unit or estimated units per case operating data from January Required: 5. Prepare the August production budget. Enter all amounts as positive numb Genuine Spice Inc. Production Budget For the Month Ended August 31 Expected cases to be sold Cases 1,500 175 Desired ending inventory Total units available 1,675 300 Estimated beginning inventory Total units to be produced 1,375 Selected item Attempt Preview Preview in Window Required: Comprehensive Problem Par 1. Determine the fixed and variable portions of the utility cost using the high-low method. Round the per unit cost to the nearest At the High Point At the Low Point 240 x 100 Variable cost per unit Total fixed cost 500 500 Total cost 740 600 2. Determine the contribution margin per case. Enter your answer to the nearest cent. Contribution margin per case $ 55.60 3. Determine the fixed costs per month, including the utility fixed cost from part (1). Utilities cost (from part 1) 500 Facility lease 14,000 / Equipment depreciation 4,300 Supplies 660 Total fixed costs 19,460 4. Determine the break-even number of cases per month 350 cases 10 Check My Works used NEGHALADELL Direct Materials Cost per Case Cost Behavior Variable Variable Units per Case 100 ozs. 30 ozs. 12 bottles Cost per Unit $0.02 0.30 Cream base Natural oils $2.00 9.00 Bottle (8-oz.) Variable 0.50 6.00 $17.00 Department Cost Behavior Direct Labor Cost per Case DIRECT LABOR Time per Case 20 min. 5 25 min Mixing Labor Rate per Hour $18.00 14.40 Variable Variable $6.00 Filling 1.20 $7.20 FACTORY OVERHEAD - Cost Behavior Total Cost Utilities Mixed $500 14,000 Facility lease Fixed Equipment depreciation Fixed 4,300 Supplies Fixed 660 $19,560 Part B - August Budgets Genuine Spice Inc Production Budget For the Month Ended August 31 Cases Expected cases to be sold 1,500 Desired ending inventory 175 Total units available 1,675 Estimated beginning inventory 300 Total units to be produced 1,375 6. Prepare August direct materials purchases budget. Enter the unit price to the nearest cent. Enter all amounts as positive num Total Units required for production Desired ending inventory Genuine Spice Inc. Direct Materials Purchases Budget For the Month Ended August 31 Cream Base (ozs.) Natural Oils (ozs.) Bottles (bottles) 137,500 41,250 16,500 1,000 360 240 250 290 600 138,250 41,320 16,140 0.02 0.3 $ 0.5 $ 2,765 $ 12,396 $ 8,070 Estimated beginning inventory Direct materials to be purchased Unit price Total direct materials to be purchased $ 23,231 Check My Work 3 more Check My Work uses remaining. Genuine Spice Inc. Direct Labor Cost Budget For the Month Ended August 31 Hours required for production of: Mixing Filling Hand and body lotion 458 115 Ho 18.00 $ 14.40 Total direct labor cost $ 8,244 $ 1,656 $ 9,9007 8. Prepare the August factory overhead cost budget. If an amount box does not require an entry, leave it blank. Genuine Spice Inc. Genume pice G Factory Overhead Cost Budget For the Month Ended August 31 Fixed V ariable Factory overhead: Total A 1 Total 9. Prepare the August budgeted income statement, including selling expenses. Enter all amounts as positive numbers. Genuine Spice Inc. Budgeted Income Statement For the Month Ended August 31