The cost of manufacturing a perfume comprises the cost of materials

Perfume has been rescuing last-minute present shoppers for decades. It’s your go-to staple for mum’s birthday, and yet every year it comes around you shudder at the price tag. There may be plenty of options at the lower end of your budget, but her favourite is guaranteed to destroy your credit limit. The truth is, perfumes can get pricey. In 2014, Harrods launched photo credit: Whilst most mere mortals stick to less extravagant options we find online or in shops, we’ll still have to brace ourselves to hand over the cash at the till. Where does the cost come from? You’re not alone in wondering about the justification for the price of fragrances. The production process is partly to blame. Quality and cost relies on the primary materials used during manufacturing and, as levels of naturally occurring essential oils are in decline, the price of both has increased. Basically, manufacturers are paying more so we also have to shell out in the shops. Luckily for consumers who want a nostril-pleasing For the eco-conscious the main issue raised by a struggling supply chain is that of sustainability, and it’s enough to get us wondering about the true cost of the fragrance industry. What about the environmental cost? Yes, we’re talking about the environmental impact of perfume manufacturing. Moving forward, sustainability needs to become a focus for the industry, and not just because of the financial penalties. The depletion of natural resources has the potential to cause long-term da...

Fresh Company produces a well-known perfume. The standard manufacturing cost of the perfume is described by the following standard cost sheet: Direct materials: Liquids (5 oz. @ $ 0.25) $1.25 Bottles (1 @ RM 0.05) $ 0.05 Direct Labor (0.25 @ $13.00) $ 3.25 Variable overhead (0.25 @ $ 5) $1.25 Fixed overhead (0.25 @ $10.00) $ 2.50 Standard cost per unit $ 8.30 Management has decided to investigate only those variances that exceed the lesser of 10% of the standard cost for each category or $22,000. During the past quarter, a total of 300,000 four-ounce bottles of perfume was produced. Descriptions of actual activity for the quarter follow: a. A total of 1.2 million ounces of liquids was purchased, mixed, and processed. The price paid per ounce averaged $0.27 b. Exactly 280,000 bottles were used. The price paid for each bottle was $ 0.055. c. Direct labor hours totaled 50,000 with a total cost of $ 650,000 d. Variable overhead cost totaled $ 242,000 e. Fixed overhead cost was $ 600,000 Normal production volume for Fresh is 280,000 bottles per quarter. The standard overhead rates are computed using normal volume. Required -Please answer the sub part 1. Compute price and usage variances for materials. 2. Compute the labor rate and labor efficiency variances. 3. Compute the fixed overhead spending and volume variance. 4. Compute the variable overhead spending and efficiency variances. Fresh Company produces a well-known perfume. The standard manufacturing cost of the perfume is ...

THE QUESTION IS FROM KAPLAN KIT: QS 67 P is considering whether to continue making a component or to buy it from an outside supplier. It uses 12,000 of the components each year. The internal manufacturing cost comprises: $/unit Direct materials 3.00 Direct labor 4.00 Variable overhead 1.00 Specific fixed cost 2.50 Other fixed costs 2.00 12.50 If the direct labor were not used to manufacture the component, it would be used to increase the production of another item for which there is unlimited demand. This other item has a contribution of $10.00 per unit but requires $8.00 of labor per unit. What is the maximum price per component, at which buying is preferable to internal manufacture? A $8.00 B $10.50 C $12.50 D $15.50 ANSWER: D Direct material 3.00 Direct labor (W1) 9.00 Variable overhead 1.00 Specific fixed cost 2.50 15.50 (W1) Relevant cost = Contribution Forgone + Direct labour = $10/2 + $4 = $9 DOUBT: WHY ARE THEY DIVIDING 10 BY 2? I CALCULATED RELEVANT COST AS: 10+4=14

Custom Mould Projects If you are a retailer looking to start their own fragrance line, we can help bring your concept to reality. From product design to branding, retail design, photography, we have you covered. Our services include:  Complete Custom bottle design and mold  Custom Bottle Cap with your emblem  Custom Display for retail stores  Marketing & Branding expert advising  Distribution to major retailers Request a free no-obligation appointment by

Custom Mould Projects If you are a retailer looking to start their own fragrance line, we can help bring your concept to reality. From product design to branding, retail design, photography, we have you covered. Our services include:  Complete Custom bottle design and mold  Custom Bottle Cap with your emblem  Custom Display for retail stores  Marketing & Branding expert advising  Distribution to major retailers Request a free no-obligation appointment by

Perfume has been rescuing last-minute present shoppers for decades. It’s your go-to staple for mum’s birthday, and yet every year it comes around you shudder at the price tag. There may be plenty of options at the lower end of your budget, but her favourite is guaranteed to destroy your credit limit. The truth is, perfumes can get pricey. In 2014, Harrods launched photo credit: Whilst most mere mortals stick to less extravagant options we find online or in shops, we’ll still have to brace ourselves to hand over the cash at the till. Where does the cost come from? You’re not alone in wondering about the justification for the price of fragrances. The production process is partly to blame. Quality and cost relies on the primary materials used during manufacturing and, as levels of naturally occurring essential oils are in decline, the price of both has increased. Basically, manufacturers are paying more so we also have to shell out in the shops. Luckily for consumers who want a nostril-pleasing For the eco-conscious the main issue raised by a struggling supply chain is that of sustainability, and it’s enough to get us wondering about the true cost of the fragrance industry. What about the environmental cost? Yes, we’re talking about the environmental impact of perfume manufacturing. Moving forward, sustainability needs to become a focus for the industry, and not just because of the financial penalties. The depletion of natural resources has the potential to cause long-term da...

Fresh Company produces a well-known perfume. The standard manufacturing cost of the perfume is described by the following standard cost sheet: Direct materials: Liquids (5 oz. @ $ 0.25) $1.25 Bottles (1 @ RM 0.05) $ 0.05 Direct Labor (0.25 @ $13.00) $ 3.25 Variable overhead (0.25 @ $ 5) $1.25 Fixed overhead (0.25 @ $10.00) $ 2.50 Standard cost per unit $ 8.30 Management has decided to investigate only those variances that exceed the lesser of 10% of the standard cost for each category or $22,000. During the past quarter, a total of 300,000 four-ounce bottles of perfume was produced. Descriptions of actual activity for the quarter follow: a. A total of 1.2 million ounces of liquids was purchased, mixed, and processed. The price paid per ounce averaged $0.27 b. Exactly 280,000 bottles were used. The price paid for each bottle was $ 0.055. c. Direct labor hours totaled 50,000 with a total cost of $ 650,000 d. Variable overhead cost totaled $ 242,000 e. Fixed overhead cost was $ 600,000 Normal production volume for Fresh is 280,000 bottles per quarter. The standard overhead rates are computed using normal volume. Required -Please answer the sub part 1. Compute price and usage variances for materials. 2. Compute the labor rate and labor efficiency variances. 3. Compute the fixed overhead spending and volume variance. 4. Compute the variable overhead spending and efficiency variances. Fresh Company produces a well-known perfume. The standard manufacturing cost of the perfume is ...

THE QUESTION IS FROM KAPLAN KIT: QS 67 P is considering whether to continue making a component or to buy it from an outside supplier. It uses 12,000 of the components each year. The internal manufacturing cost comprises: $/unit Direct materials 3.00 Direct labor 4.00 Variable overhead 1.00 Specific fixed cost 2.50 Other fixed costs 2.00 12.50 If the direct labor were not used to manufacture the component, it would be used to increase the production of another item for which there is unlimited demand. This other item has a contribution of $10.00 per unit but requires $8.00 of labor per unit. What is the maximum price per component, at which buying is preferable to internal manufacture? A $8.00 B $10.50 C $12.50 D $15.50 ANSWER: D Direct material 3.00 Direct labor (W1) 9.00 Variable overhead 1.00 Specific fixed cost 2.50 15.50 (W1) Relevant cost = Contribution Forgone + Direct labour = $10/2 + $4 = $9 DOUBT: WHY ARE THEY DIVIDING 10 BY 2? I CALCULATED RELEVANT COST AS: 10+4=14

THE QUESTION IS FROM KAPLAN KIT: QS 67 P is considering whether to continue making a component or to buy it from an outside supplier. It uses 12,000 of the components each year. The internal manufacturing cost comprises: $/unit Direct materials 3.00 Direct labor 4.00 Variable overhead 1.00 Specific fixed cost 2.50 Other fixed costs 2.00 12.50 If the direct labor were not used to manufacture the component, it would be used to increase the production of another item for which there is unlimited demand. This other item has a contribution of $10.00 per unit but requires $8.00 of labor per unit. What is the maximum price per component, at which buying is preferable to internal manufacture? A $8.00 B $10.50 C $12.50 D $15.50 ANSWER: D Direct material 3.00 Direct labor (W1) 9.00 Variable overhead 1.00 Specific fixed cost 2.50 15.50 (W1) Relevant cost = Contribution Forgone + Direct labour = $10/2 + $4 = $9 DOUBT: WHY ARE THEY DIVIDING 10 BY 2? I CALCULATED RELEVANT COST AS: 10+4=14

Fresh Company produces a well-known perfume. The standard manufacturing cost of the perfume is described by the following standard cost sheet: Direct materials: Liquids (5 oz. @ $ 0.25) $1.25 Bottles (1 @ RM 0.05) $ 0.05 Direct Labor (0.25 @ $13.00) $ 3.25 Variable overhead (0.25 @ $ 5) $1.25 Fixed overhead (0.25 @ $10.00) $ 2.50 Standard cost per unit $ 8.30 Management has decided to investigate only those variances that exceed the lesser of 10% of the standard cost for each category or $22,000. During the past quarter, a total of 300,000 four-ounce bottles of perfume was produced. Descriptions of actual activity for the quarter follow: a. A total of 1.2 million ounces of liquids was purchased, mixed, and processed. The price paid per ounce averaged $0.27 b. Exactly 280,000 bottles were used. The price paid for each bottle was $ 0.055. c. Direct labor hours totaled 50,000 with a total cost of $ 650,000 d. Variable overhead cost totaled $ 242,000 e. Fixed overhead cost was $ 600,000 Normal production volume for Fresh is 280,000 bottles per quarter. The standard overhead rates are computed using normal volume. Required -Please answer the sub part 1. Compute price and usage variances for materials. 2. Compute the labor rate and labor efficiency variances. 3. Compute the fixed overhead spending and volume variance. 4. Compute the variable overhead spending and efficiency variances. Fresh Company produces a well-known perfume. The standard manufacturing cost of the perfume is ...