Budget Performance Report Genie in a Bottle Company (GBC) manufactures plastic t

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:

At the beginning of July, GBC management planned to produce 460,000 bottles. The actual number of bottles produced for July was 496,800 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.

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. Round your answers to two decimal places.

c. The Company's actual costs were $798.64 than budgeted. direct labor and direct material cost variances more than offset a small factory overhead cost variance.

Cost Category Standard Cost
per 100 Two-Liter
Bottles Direct labor $1.28 Direct materials 5.8 Factory overhead 0.4 Total $7.48

Explanation / Answer

Manufacturing Cost Budget For the Month Ended March 31 Standard Cost at Planned Volume (460,000 Bottles) Manufacturing costs: Direct labor 460000*1.28/100                  5,888.00 Direct materials 5.8*460000/100                26,680.00 Factory overhead 460000/100*.4                  1,840.00 Total                34,408.00 Genie in a Bottle Company Manufacturing Costs-Budget Performance Report For the Month Ended March 31 Standard Cost Cost at Actual Variance- Volume (496,800 (Favorable) Actual Bottles) Unfavorable Costs Manufacturing costs: Direct labor 496800/100*1.28 6232 6359.04 -127.04 Direct materials 5.8*496800/100 28123 28814.4 -691.4 Factory overhead .4*496800/100 2007 1987.2 19.8 Total manufacturing cost 36362 37160.64 -798.64 There is a favourable manufacturing cost variance of $798.64

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