Question

1. Genie in a Bottle Company (GBC) manufactures plastic two-liter bottles for the beverage industry. The cost Performance goals, often relating to how much a product should cost.standards per 100 two-liter bottles are as follows:

   Cost Category		Standard Cost per 100 Two-Liter Bottles
   Direct labor			$1.54
   Direct materials			5.9
   Factory overhead			0.28
   	Total		$7.72

   At the beginning of July, GBC management planned to produce 490,000 bottles. The actual number of bottles produced for July was 529,200 bottles. The actual costs for July of the current year were as follows:

   Cost Category		Actual Cost for the Month Ended July 31
   Direct labor						$7,987
   Direct materials						30,473
   Factory overhead						1,497
   	Total					$39,957

   Enter all amounts as positive numbers.

   a. Prepare the July manufacturing A detailed estimate of what a product should cost.standard cost budget (direct labor, direct materials, and factory overhead) for WBC, assuming planned production.

   Genie in a Bottle Company
   Manufacturing Cost Budget
   For the Month Ended March 31
   	Standard Cost at Planned Volume (490,000 Bottles)
   Manufacturing costs:
   Direct labor	$
   Direct materials
   Factory overhead
   Total	$

   Feedback

   b. Prepare a budget performance report for manufacturing costs, showing the total The difference between actual cost and the flexible budget at actual volumes.cost variances for direct materials, direct labor, and factory overhead for July. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number. Round your answers to two decimal places.

   Genie in a Bottle Company
   Manufacturing Costs-Budget Performance Report
   For the Month Ended March 31
   	Actual Costs	Standard Cost at Actual Volume (529,200 Bottles)	Cost Variance- (Favorable) Unfavorable
   Manufacturing costs:
   Direct labor	$	$	$
   Direct materials
   Factory overhead
   Total manufacturing cost	$	$	$

   Feedback

   c. The Company's actual costs were $897.24

   • more
   • less
   than budgeted.
   • Favorable
   • Unfavorable
   direct labor and direct material cost variances more than offset a small
   • favorable
   • unfavorable
   factory overhead cost variance.

Answer 1

C) The company's actual cost were $ 897.24 less than budgeted

Favorable ( 912.48 ) Direct labor and Direct material cost variance more than offset a small Unfavorable (15.24) Factory overhead cost variance

( Direct labor + Direct material = 162.58 + 749.8

= 912.48 Favorable variance