Comprehensive Problem Part A: Part A - Break-Even Analysis Instructions: 1. Dete

ID: 2444011 • Letter: C

Question

Comprehensive Problem
Part A:

Part A - Break-Even Analysis

Instructions:

1. Determine the fixed and variable portion of the utility cost using the high-low method. Round the per unit cost to the nearest cent.

2. Determine the contribution margin per case. Enter your answer to the nearest cent. For example, 89.458 would be entered as 89.46

Contribution margin per case: $

3. Determine the fixed costs per month, including the utility fixed cost from part (1). Enter your answers to the nearest whole number. For example, 89.45 would be entered as 89 and 89.56 would be entered as 90.

4. Determine the break-even number of cases per month. Round your answer to the nearest whole number.

Cases

Comprehensive Problem
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.

Part B- August Budgets

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.

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

6. Prepare the August direct materials purchases budget. Enter the unit price as dollars and cents but carry out to three decimal places. For example, enter .2357 as 0.236 and enter 3.61 as 3.610. Enter all amounts as positive numbers.

7. Prepare the August direct labor budget. For hours required, round to nearest whole hour. For hourly rate, enter the amount as rounded to nearest whole dollar.

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

9. On your own paper, a spreadsheet or working papers, prepare the August budgeted income statement, including selling expenses. Provide the following amounts:

Comprehensive Problem
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.

Part C- August Variance Analysis

The prices of the materials were different than standard due to fluctuations in market prices. The standard quantity of materials used per case was an ideal standard. The Mixing 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.

10. Determine and interpret the direct materials price and quantity variances for the three materials. Enter the costs in dollars and cents (unless otherwise instructed). Enter all amounts as positive numbers.

Enter the standard price to three decimal places. For example, $1.3458 would be entered as 1.346.

Interpret your results.