Genie in a Bottle Company (GBC) manufactures plastic two-liter bottles for the b
ID: 2394017 • Letter: G
Question
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:
At the beginning of July, GBC management planned to produce 440,000 bottles. The actual number of bottles produced for July was 475,200 bottles. The actual costs for July of the current year were as follows:
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.
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Compare the actual costs with the standard cost at actual volume for direct labor, direct materials, and overhead. Identify the cost variance as favorable (actual less than standard) or unfavorable (actual greater than standard).
Review the concepts of favorable and unfavorable variances.
Learning Objective 2.
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.
Feedback
Compare the actual costs with the standard cost at actual volume for direct labor, direct materials, and overhead. Identify the cost variance as favorable (actual less than standard) or unfavorable (actual greater than standard).
Review the concepts of favorable and unfavorable variances.
Learning Objective 2.
c. The Company's actual costs were $694.24 than budgeted. direct labor and direct material cost variances more than offset a small factory overhead cost variance.
Feedback
Compare the actual costs with the standard cost at actual volume for direct labor, direct materials, and overhead. Identify the cost variance as favorable (actual less than standard) or unfavorable (actual greater than standard).
Review the concepts of favorable and unfavorable variances.
Learning Objective 2.
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Incorrect
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Cost Category Standard Costper 100 Two-Liter
Bottles Direct labor $1.12 Direct materials 5.26 Factory overhead 0.24 Total $6.62
Explanation / Answer
Answer for a)
Genie in a bottle company manufacturing cost budget for the month ended July 31:
4928
[$1.12×440000 bottles/100 bottles]
23144
[$5.26×440000 bottles/100 bottles]
1056
[0.24$×440000 bottles/100bottles]
Answer for b)
Genie in a bottle company manufacturing cost budget comparison for month ended July 31
5322.24
[$1.12×475200bottles/100bottles]
24995.52
[$5.26×475200bottles/100bottles]
1140.48
[$0.24×475200bottles/100bottles]
Answer for c)
The company actual costs were $694.24 Less than budgeted.
standards costs at planned volume(440000 bottles) Manufacturing costs: $ Direct labour4928
[$1.12×440000 bottles/100 bottles]
Direct materials23144
[$5.26×440000 bottles/100 bottles]
Factory overheads1056
[0.24$×440000 bottles/100bottles]
Total 29128Related Questions
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