Question

Chapter 22 HW

Please answer . This is the b section from a and c. I send it but no one has send it back. Thank you.

COMPPRO.05-01.PART.B

Comprehensive Problem 5
Part B:

Note: This section is a continuation from Part A of the comprehensive problem. Be sure you have completed Part A before attempting Part B. You may have to refer back to data presented in Part A and use answers from Part A when completing this section.

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 direct materials, direct labor, and factory overhead costs are as follows:

DIRECT MATERIALS Cost Behavior Units per Case Cost per Unit Direct Materials Cost per Case Cream base Variable 100 ozs. $0.02 $2.00 Natural oils Variable 30 ozs. 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 Direct Labor 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 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
Estimated finished goods inventory, August 1	300	$12,000
Desired finished goods inventory, August 31	175	7,000

Materials Inventory:

	Cream Base (ozs.)	Oils (ozs.)	Bottles (bottles)
Estimated materials inventory, August 1	250	290	600
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:

5. Prepare the August production budget. Enter all amounts as positive numbers.

Genuine Spice Inc. Production Budget For the Month Ended August 31
	Cases

6. Prepare the August direct materials purchases budget. Enter the unit price to the nearest cent. Enter all amounts as positive numbers.

Genuine Spice Inc. Direct Materials Purchases Budget For the Month Ended August 31
	Cream Base (ozs.)			Natural Oils (ozs.)			Bottles (bottles)			Total
	$			$			$
	$			$			$			$

7. Prepare the August direct labor cost budget. For hours required, round to nearest whole hour. For hourly rate, enter to the nearest cent, if required.

Genuine Spice Inc. Direct Labor Cost Budget For the Month Ended August 31
Hours required for production of:	Mixing		Filling		Total
	$		$
	$		$		$

8. Prepare the August factory overhead cost budget. If an amount box does not require an entry, leave it blank.

Genuine Spice Inc. Factory Overhead Cost Budget For the Month Ended August 31
Factory overhead:	Fixed		Variable		Total
	$		$		$
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
				$
			$
		$
		$
				$

Answer 1

5	Production Budget
		Cases
	Estimated Sales in cases	1500
	add: Closing inventory needed	175
	Total Cases needed	1675
	less:Beginning inventory	300
	Production to be done	1375
6	Direct Material Budget
	Production to be done	1375
	Cream			Natural Oils			Bottles			Total
	Unit per case	Total *1375	Cost *unit cost	Unit per case	Total *1375	Cost *unit cost	Unit per case	Total *1375	Cost *unit cost	Total Q	Cost
Material Needed	100	137500	2750	300	412500	123750	12	16500	8250	566500	134750
add: Closing		1000	20		360	108		240	120	1600	248
Total Material Needed		138500	2770		412860	123858		16740	8370	568100	134998
Less: Beginning		250	5		290	87		600	300	1140	392
Purchases		138250	2765		412570	123771		16140	8070	566960	134606
7	Direct Labor Budget
	Hour Required for production of	Mixing		Filling		Total
		20 Min=1/3 Hour	458	5 Min=1/12 Hour	115	25 min	573
	Per Hour Rate	18		14.4
	Total Hour	18*458	8250	14.4*115	1650		9900
8	Fixed Ovrhead Budget	19560 as fixed
	Varible overhead	Nill
9	Budgeted Income Statement
	Budgeted Sale (1500*100)			150000
	Less:
	Direct Material (1500*17)		25500
	Direct Labor (1500*7.2)		10800
	Sales Commission (1500*20)		30000
	Total Variable Cost			66300
	Gross Margin	150000-66300		83700
	Less: Fixed Cost
	Utiliites		600
	Facility		14000
	Depreciation		4300
	Supplies		660
	Total Fixed Cost			19560
	Net Income	83700-19560		64140