- Instructions Genuine Spice Inc Began Operations On January 1 Of The Current Year The Company Produces Eight Ounce Bottl 1 (16.78 KiB) Viewed 94 times
- Instructions Genuine Spice Inc Began Operations On January 1 Of The Current Year The Company Produces Eight Ounce Bottl 2 (57.41 KiB) Viewed 94 times
- Instructions Genuine Spice Inc Began Operations On January 1 Of The Current Year The Company Produces Eight Ounce Bottl 3 (17.74 KiB) Viewed 94 times
- Instructions Genuine Spice Inc Began Operations On January 1 Of The Current Year The Company Produces Eight Ounce Bottl 4 (13.23 KiB) Viewed 94 times
- Instructions Genuine Spice Inc Began Operations On January 1 Of The Current Year The Company Produces Eight Ounce Bottl 5 (30.52 KiB) Viewed 94 times
- Instructions Genuine Spice Inc Began Operations On January 1 Of The Current Year The Company Produces Eight Ounce Bottl 6 (23.83 KiB) Viewed 94 times
- Instructions Genuine Spice Inc Began Operations On January 1 Of The Current Year The Company Produces Eight Ounce Bottl 7 (61.2 KiB) Viewed 94 times
- Instructions Genuine Spice Inc Began Operations On January 1 Of The Current Year The Company Produces Eight Ounce Bottl 8 (23.73 KiB) Viewed 94 times
- Instructions Genuine Spice Inc Began Operations On January 1 Of The Current Year The Company Produces Eight Ounce Bottl 9 (9.83 KiB) Viewed 94 times
- Instructions Genuine Spice Inc Began Operations On January 1 Of The Current Year The Company Produces Eight Ounce Bottl 10 (34.8 KiB) Viewed 94 times
- Instructions Genuine Spice Inc Began Operations On January 1 Of The Current Year The Company Produces Eight Ounce Bottl 11 (24.38 KiB) Viewed 94 times
- Instructions Genuine Spice Inc Began Operations On January 1 Of The Current Year The Company Produces Eight Ounce Bottl 12 (27.19 KiB) Viewed 94 times
- Instructions Genuine Spice Inc Began Operations On January 1 Of The Current Year The Company Produces Eight Ounce Bottl 13 (27.39 KiB) Viewed 94 times
- Instructions Genuine Spice Inc Began Operations On January 1 Of The Current Year The Company Produces Eight Ounce Bottl 14 (46.57 KiB) Viewed 94 times
- Instructions Genuine Spice Inc Began Operations On January 1 Of The Current Year The Company Produces Eight Ounce Bottl 15 (19.18 KiB) Viewed 94 times
- Instructions Genuine Spice Inc Began Operations On January 1 Of The Current Year The Company Produces Eight Ounce Bottl 16 (24.93 KiB) Viewed 94 times
- Instructions Genuine Spice Inc Began Operations On January 1 Of The Current Year The Company Produces Eight Ounce Bottl 17 (17.82 KiB) Viewed 94 times
- Instructions Genuine Spice Inc Began Operations On January 1 Of The Current Year The Company Produces Eight Ounce Bottl 18 (31.09 KiB) Viewed 94 times
- Instructions Genuine Spice Inc Began Operations On January 1 Of The Current Year The Company Produces Eight Ounce Bottl 19 (25.09 KiB) Viewed 94 times
- Instructions Genuine Spice Inc Began Operations On January 1 Of The Current Year The Company Produces Eight Ounce Bottl 20 (17.02 KiB) Viewed 94 times
- Instructions Genuine Spice Inc Began Operations On January 1 Of The Current Year The Company Produces Eight Ounce Bottl 21 (15.75 KiB) Viewed 94 times
Instructions DIRECT LABOR Department Cost Behavior Time per Case Labor Rate 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 Utilities Facility lease Equipment depreciation Supplies Cost Behavior Total Cost Mixed $600 Fixed 14,000 Fixed 4,300 Fixed 660 $19,560
Instructions 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 utates 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 Utility Total Cost January 500 $600 February BOO 660 March 1,200 740 April 1,100 720 May 950 June 1,025 600 705
Questions (Part A) 1. Determine the Exed and vanable portion of the unity cost using the bigh fow method. Do not round your intermediate calculations and round variable cost per unit answers to two decimal places. At High Point At Low Point Variable cost per unit S Totalfixed cost $ Total cost $ 2 Determine the contribution.margin per case. Do not round your intermediate calculations and round your final answer to two decimal places, S
3. Determine the fixed costs per month, including the utility fixed cost from part (1) 1 Total fixed costs: 2 3 5 4. Determine the break-even number of cases per month cases
Instructions 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 $12,000 Estimated finished goods inventory, August 1 Dessed frushed goods inventory, August 31 175 7,000 Oils Bottles Cream Base (oz.) (02.) (bottles) Estimated materials inventory, August 1 250 290 600 Desired materials inventory, August 31 1,000 360 240 There was negigble 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 unts per case operating data from January Materials Inventory.
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 Ou Plus bel Total cases required Less X
Instructions Part C-August Variance Analysis During September of the current year, the controller was asked to perform vanance 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 Materials Price per Unit Quantity per Case Cream base $0 016 per oz 1020 Natural ols $0 32 per oz 31 oz Botte (oz) $0.42 per bottle 12.5 bottles Actual Direct Labor Rate Mixing $18.20 Filling 14.00 Actual vanable overhead Normal volume Actual Direct Labor Time per Case 19 50 min 560 min $305 00 1,000 cases
The prices of the materials were different from standard due to fluctuations in market prices. The standard quantity of materials used per case was an ideal standard. The Moxing Department used a higher grade labor classification during the month, thus causing the actual labor rate to exceed standard. The Filling Department used a lower grade labor classification during the month, thus causing the actual labor rate to be less than standard
Direct Materials Purchases Budget 6 Prepare the August direct materials purchases budget. Enter all amounts as positive numbers. Round unit price answers to two decimal places. Genuine Spice Inc. Direct Materials Purchases Budget For the Month Ended August 31 Bottles (bottles) Plus Total units required Less Total matenals to be purchased S Cream Base (oz.) 1$ S Natural Oils (oz.) 15 $ Total
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 $ X $ $ $ Total
Factory overhead: Utilities Facility lease Equipment depreciation. Supplies Total $ Genuine Spice Inc. Factory Overhead Cost Budget For the Month Ended August 31 Variable $ Fixed $ Total
Budgeted Income Statement 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 matenals 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 s $ $
Budgeted Income Statement Creet materials inventory, August 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 $ $
Vanance Analysis (Part C) 10. Determine and interpret the direct materials price and quantity variances for the three materials Round your answers to three decimal places. 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 Difference $ X Direct materials price vanance
1 Vanance Analysis (Part C) Difference x Direct materials quantity variance S The fuctuation in market prices quantity used standard prices Direct Materials Quantity Variance Cream Base Natural Oils caused the direct material price vansances. All the quantity variances were 4 4 4 $ Bottles indicating
Variance Analysis (Part C) tt Determine and interpret the deect labor rate and time variances for the two departments Round hours to the nearest tenth of an hour. Enter a favorable vanance as a negative amount and an unfavorable variance as positive amount Direct Labor Rate Variance Filling Department Difference X Direct labor rate variance S $ Mixing Department $
Variance Analysis (Part C) Direct labor rate variance Difference X Direct labor time variance The change in the caused the labor rate variances. This change i 12: Determine and interpret the factory overhead controllable vanance Enter a favorable variance as a negative amount and an unfam Direct Labor Time Variance Mixing Department Filling Department have been responsible for the direct labor time variance
Vanance Analysis (Part C) 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 The factory overhead controllable variance was caused by the variance in 4 equipment depreciation factory lease supplies utilities
Vanance Analysis (Part C) 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 $ Factory overhead volume vanance The volume vanance indicates the cost of $
14 Why are the standand direct labor and direct material 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) Variable costs of the budget must flex to the actual or standard production volume, whichever is higher so that variances are compared across the same production volume Variable costs of the budget must Bex to the standard production volume so that vanances are compared across the same production volume Variable costs of the budget must flex to the actual production volume so that vanances are compared across the same production volume