I have attached photos of the question. I need help with question 4. Question 4 asks us to find the break even number (units) of cases per month.
I have attached photos of the question. I need help with question 4. Question 4 asks us to find the break even number (units) of cases per month.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
I have attached photos of the question. I need help with question 4. Question 4 asks us to find the break even number (units) of cases per month.
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FACTORY OVERHEAD
1. COMPPRO.05.01.PART.A
Cost Behavior
Total Cost
2. COMPPRO.05.01.PART.B
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 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
690
June
1,025
705
Required:
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FACTORY OVERHEAD
1. COMPPRO.05.01.PART.A
Cost Behavior
Total Cost
2. COMPPRO.05.01.PART.B
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 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
690
June
1,025
705
Required:
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1. COMPPRO.05.01.PART.A
Comprehensive Problem 5
Part A:
2. COMPPRO.05.01.PART.B
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 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
Units
Cost
Direct Materials
Behavior
per Case
per Unit
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
Cost
Time
Labor Rate
Direct Labor
Department
Behavior
per Case
per Hour
Cost per Case
Mixing
Variable
20 min.
$18.00
$6.00
Filling
Variable
14.40
1.20
25 min.
$7.20
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1. COMPPRO.05.01.PART.A
Comprehensive Problem 5
Part A:
2. COMPPRO.05.01.PART.B
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 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
Units
Cost
Direct Materials
Behavior
per Case
per Unit
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
Cost
Time
Labor Rate
Direct Labor
Department
Behavior
per Case
per Hour
Cost per Case
Mixing
Variable
20 min.
$18.00
$6.00
Filling
Variable
14.40
1.20
25 min.
$7.20
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