Business
Business, 11.02.2021 20:50, edjiejwi

Genuine Spice Inc. began operations on January 1 of the current year. The company produces eight- 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 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

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
Cost Behavior Total Cost
Utilities Mixed $600
Facility lease Fixed 14,000
Equipment depreciation Fixed 4,300
Supplies Fixed 660
$19,560

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:

2016 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:

Required-Part A:
a. Determine the fixed and variable portion of the utility cost using the high-low method.
b. Determine the contribution margin per case.
c. Determine the fixed costs per month, including the utility fixed cost from part (1).
d. Determine the break-even number of cases per month.

answer
Answers: 3

Other questions on the subject: Business

image
Business, 22.06.2019 09:50, steph76812
Why should managers invest any excess cash
Answers: 1
image
Business, 22.06.2019 13:20, ooEVAoo
Suppose farmer lane grows and sells cotton in a perfectly competitive industry. the market price of cotton is $1.64 per kilogram, and his marginal cost of production is $1.44 per kilogram, which increases with output. assume farmer lane is currently earning a profit. can farmer lane do anything to increase his profit in the short run? farmer lane: a. cannot do anything to increase his profit. b. may or may not be able to increase his profit. c. can increase his profit by raising his price. d. can increase his profit by producing more output. e. can increase his profit by shutting down.
Answers: 1
image
Business, 22.06.2019 19:20, dayday0
Six years ago, an 80-kw diesel electric set cost $160,000. the cost index for this class of equipment six years ago was 187 and is now 194. the cost-capacity factor is 0.6. the plant engineering staff is considering a 120-kw unit of the same general design to power a small isolated plant. assume we want to add a precompressor, which (when isolated and estimated separately) currently costs $13291. determine the total cost of the 120-kw unit. (hint: skip $ and comma symbols)
Answers: 3
image
Business, 23.06.2019 03:00, Neko1kat
To assess the risk and return involved in a purchase decision, which practical questions should a potential buyer ask? select three options. what can go wrong? what are the alternatives? how will it affect my status in society? what is the likely return? is the risk worth the return?
Answers: 2
Do you know the correct answer?
Genuine Spice Inc. began operations on January 1 of the current year. The company produces eight- ou...

Questions in other subjects: