Quivers Inc. began operations on January 1 of the current year. The company produces eight-ounce bottles...

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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 followe DIRECT MATERIALS Cost Behavior Units per Case Cream base Variable 100 oz. Natural oils Variable 30 oz. Cost per Unit $0.02 0.30 Direct Materials Cost per Case $ 2.00 9.00 Bottle (8-oz.) Variable 12 bottles 0.50 6.00 $17.00 DIRECT LABOR Department Cost Behavior Time Labor Rate Direct Labor per Case per Hour Cost per Case Mixing Variable 20 min. $18.00 $6.00 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 Quivers 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: Utility Total Month Case Product Cost January 500 $ 600.00 February 800 $ 660.00 March 1,200 $ 740.00 April 1,100 $ 720.00 May 950 $ 690.00 June 1,025 $ 705.00 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, Augusl Desired finished goods inventory, August 3 Materials Inventory Estimated materials inventory, August 1 Desired materials inventory, August 31 Cases Cost 300 $ 12,000.00 175 $ 7,000.00 ream Base (oz. Oils (oz.) Zottels (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. Part C. August Variance Analysis During September of the current year, Robin 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 than planned at the beginning of the month. Actual data for August were as follows: Actual Direct Actual Direct Material Materials Materials Price per Quantity Cream Base $ 0.160 102 (oz.) Natural Oils 0.32 31 (oz.) Bottles $ 0.42 12.5 Actual Actual Direct Activity Direct Labor Time Labor Rate per Case Mixing $ 18.20 19.50 Filling $ 14.00 5.60 Actual Variable Overhead $ 305.00 Normal Volume (Cases) 1,600 The prices of the materials were different from standard due to fluctuations in market prices. The standard quantity of materials used per case was an ideal standard. The Mixing Department used a higher grade labor classification during the month, thus causing the actual labor rate to exceed standard. The Filling Department used a lower grade labor classification during the month, thus causing the actual labor rate to be less than standard. Direct Materials Price Variance Cream Base Natural Oils Bottles Cases Amount Actual Price Standard Price Difference * Actual Quantity (Units) DirectiviQTENUS PRICE Decision Analysis Direct Materials Quantity Variance Actual Quantiy Standard Quantity Difference *Standard Price Direct MOTENOIS QUOmmy Analysis Decision Total Cream Base Natural Oils Bottles Cases Amount Total Actual Quantity Cream BaseNatural Oil Bottles Standard Quantity Cream BaseNatural Oil Bottles Direct Labor Rate Variance Mixing Filing Department Departmen Units Minutes Actual Rate Standard Rate Difference *Actual Time (Hours) Direct Labor Rate Variance Decision Analysis Direct Labor Time Variance Actual Time Standard Time Difference *Standard Rate Direct Labor Time Variance Analysis Decision Hours Total Actual Time Mixing Filing Standard Time Mixing Department Departmen Filing Units Minutes Hours Total Mixing Filing Factory Overhead Controllable Variance Actual variable overhead Variable overhead at standard cost Factory overhead controllable variance Variance overhead (utility Cases cost) at standard cost Total fixed factory overhead Total Decision Factory Overhead Volume Variance Normal volume (cases) Actual volume (cases) Difference * Fixed factory overhead rate Fixed factory overhead rate Cases Total fixed factory overhead Total Analysis $0.00 Decision 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 followe DIRECT MATERIALS Cost Behavior Units per Case Cream base Variable 100 oz. Natural oils Variable 30 oz. Cost per Unit $0.02 0.30 Direct Materials Cost per Case $ 2.00 9.00 Bottle (8-oz.) Variable 12 bottles 0.50 6.00 $17.00 DIRECT LABOR Department Cost Behavior Time Labor Rate Direct Labor per Case per Hour Cost per Case Mixing Variable 20 min. $18.00 $6.00 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 Quivers 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: Utility Total Month Case Product Cost January 500 $ 600.00 February 800 $ 660.00 March 1,200 $ 740.00 April 1,100 $ 720.00 May 950 $ 690.00 June 1,025 $ 705.00 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, Augusl Desired finished goods inventory, August 3 Materials Inventory Estimated materials inventory, August 1 Desired materials inventory, August 31 Cases Cost 300 $ 12,000.00 175 $ 7,000.00 ream Base (oz. Oils (oz.) Zottels (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. Part C. August Variance Analysis During September of the current year, Robin 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 than planned at the beginning of the month. Actual data for August were as follows: Actual Direct Actual Direct Material Materials Materials Price per Quantity Cream Base $ 0.160 102 (oz.) Natural Oils 0.32 31 (oz.) Bottles $ 0.42 12.5 Actual Actual Direct Activity Direct Labor Time Labor Rate per Case Mixing $ 18.20 19.50 Filling $ 14.00 5.60 Actual Variable Overhead $ 305.00 Normal Volume (Cases) 1,600 The prices of the materials were different from standard due to fluctuations in market prices. The standard quantity of materials used per case was an ideal standard. The Mixing Department used a higher grade labor classification during the month, thus causing the actual labor rate to exceed standard. The Filling Department used a lower grade labor classification during the month, thus causing the actual labor rate to be less than standard. Direct Materials Price Variance Cream Base Natural Oils Bottles Cases Amount Actual Price Standard Price Difference * Actual Quantity (Units) DirectiviQTENUS PRICE Decision Analysis Direct Materials Quantity Variance Actual Quantiy Standard Quantity Difference *Standard Price Direct MOTENOIS QUOmmy Analysis Decision Total Cream Base Natural Oils Bottles Cases Amount Total Actual Quantity Cream BaseNatural Oil Bottles Standard Quantity Cream BaseNatural Oil Bottles Direct Labor Rate Variance Mixing Filing Department Departmen Units Minutes Actual Rate Standard Rate Difference *Actual Time (Hours) Direct Labor Rate Variance Decision Analysis Direct Labor Time Variance Actual Time Standard Time Difference *Standard Rate Direct Labor Time Variance Analysis Decision Hours Total Actual Time Mixing Filing Standard Time Mixing Department Departmen Filing Units Minutes Hours Total Mixing Filing Factory Overhead Controllable Variance Actual variable overhead Variable overhead at standard cost Factory overhead controllable variance Variance overhead (utility Cases cost) at standard cost Total fixed factory overhead Total Decision Factory Overhead Volume Variance Normal volume (cases) Actual volume (cases) Difference * Fixed factory overhead rate Fixed factory overhead rate Cases Total fixed factory overhead Total Analysis $0.00 Decision