Question

Budget Performance Report

Genie in a Bottle Company (GBC) manufactures plastic two-liter bottles for the beverage industry. The cost standards per 100 two-liter bottles are as follows:

Cost Category		Standard Cost per 100 Two-Liter Bottles
Direct labor			$1.14
Direct materials			6.2
Factory overhead			0.32
	Total		$7.66

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						$5,912
Direct materials						32,023
Factory overhead						1,710
	Total					$39,645

Enter all amounts as positive numbers.

a. Prepare the July manufacturing 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 July 31
	Standard Cost at Planned Volume(490,000 Bottles)
Manufacturing costs:
Direct labor	$
Direct materials
Factory overhead
Total	$

b. Prepare a budget performance report for manufacturing costs, showing the total 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. If required, round your answers to nearest cent.

Genie in a Bottle Company
Manufacturing Costs-Budget Performance Report
For the Month Ended July 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	$	$	$

c. The Company's actual costs were $891.72 than budgeted. direct labor and direct material cost variances more than offset a small factory overhead cost variance.

Answer 1

a. July manufacturing standard cost budget (direct labor, direct materials, and factory overhead) for WBC, assuming planned production is

Genie in a Bottle Company
Manufacturing Cost Budget
For the Month Ended July 31
	Standard Cost at Planned Volume(490,000 Bottles)	Working
Manufacturing costs:
Direct labor	5,586	1.14*490,000/100
Direct materials	30,380	6.2*490,000/100
Factory overhead	1,568	0.32*490,000/100
Total	37,534

b. Budget performance report for manufacturing costs, showing the total cost variances for direct materials, direct labor, and factory overhead for July is as prepared below:

Genie in a Bottle Company
Manufacturing Costs-Budget Performance Report
For the Month Ended July 31
	Actual	Standard Cost at Actual Volume(529,200 Bottles)	Cost Variance-
	Costs		(Favorable)
			Unfavorable
Manufacturing costs:
Direct labor	5,912	6,031	-119
Direct materials	32,023	32,798	-775
Factory overhead	1,710	1,693	17
Total manufacturing cost	39,645	40,521	-876