Question

Please help me with number 14 only. thank you so much!

Part C: Note: This section is a continuation from Parts A and B of the comprehensive problem. Be sure you have completed Parts A and B before attempting Part C. You may have to refer back to data presented in Parts A and B as well as use answers from those parts 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 laber, and factory overhead costs are as follows: DIRECT MATERIALS Cost Behavior Cost per Unit Direct Materials Cost per Case $2.00 Cream base Units per Case 100 S. 30 oz. 12 bottles Variable $0.02 Natural oils Variable 0.30 9.00 Bottle (8-oz.) Variable 0.50 6.00 $17.00 DIRECT LABOR Department Cost Behavior Time per Case Labor Rate per Hour Direct Labor Cost per Case $6.00 $18.00 Mixing Filling Variable Variable 20 min. 5 14.40 1.20 25 min. $7.20 FACTORY OVERHEAD Cost Behavior Total Cost

Answer 1

14) As mentioned in the question that 1500 actual cases were produced in the month of August , 250 more than planned.Therefore 1500 - 250 = 1250.

The production volume of 1250 cases was planned at the beginning of August.

there are 100 ozs of Cream base, 30 ozs natural oil and 12 bottles per case.

Since the standard cost was based on the planned cases(1250), thus the total units= (100 + 30+12)*1250

units = 162500 ozs + 15000 bottles

= 177500 units.

Thus the standard cost must be based on 177500 units of actual production

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